BEARISH
THREE OUTSIDE DOWN| Type: | Reversal |
| Relevance: | Bearish |
| Prior Trend: | Bullish |
| Reliability: | High |
| Confirmation: | Suggested |
| No. of Sticks: | 3 |
Definition:
The Bearish Three Outside Down Pattern is another name for the Confirmed Bearish Engulfing Pattern. The third day confirms the bearish trend reversal.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a Bearish Engulfing Pattern in the first two days.
3. Then we see a black candlestick on the third day with a lower close than the second day.
Explanation: The first two days forms a Bearish Engulfing Pattern, and the third day confirms the reversal suggested by the Bearish Engulfing Pattern since it is a black candlestick closing with a new low for the three days.
Important Factors:
The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.
The Bearish Three Outside Down Pattern is another name for the Confirmed Bearish Engulfing Pattern. The third day confirms the bearish trend reversal.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a Bearish Engulfing Pattern in the first two days.
3. Then we see a black candlestick on the third day with a lower close than the second day.
Explanation: The first two days forms a Bearish Engulfing Pattern, and the third day confirms the reversal suggested by the Bearish Engulfing Pattern since it is a black candlestick closing with a new low for the three days.
Important Factors:
The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.
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