Bearish Breakaway Candlestick Pattern

The bearish breakaway candlestick pattern is a bearish reversal pattern. It is considered an effective way to help predict a bearish move in a stock.

This candlestick consists of 5 different days. The first day there is a large run up in price. The second day the price gaps up, but does very little after that. The third and fourth days also have very small moves whether it is bullish or bearish.

The fifth and final day the security crashes. This day marks that there is likely going to be a bearish run in the exchange.

Why does the bearish breakaway work? The first two days indicate a strong bullish presence. However when the bulls are unable to push the stock any higher it signals that bullish pressure is weakening. When the market starts to fall it is the final straw. Buying pressure dissolves and selling pressure increases.