Bearish Two Black Crows

The bearish two black crows pattern is a top reversal candlestick pattern that can be very useful. The pattern consists of three different days.

The first day is a big white candlestick. On this day the stock rallies. The rally continues after the market closes and the stock gaps up. However the stock is unable to continue its march upward.

Instead the stock falls throughout the day. The next candlestick continues to fall so that it closes within the first candlestick. This signals that the stock is likely to turn around.

Why does the bearish two crows indicate a reversal? After the first day the bulls lose strength. The last two days are dominated by selling pressure indicating the strength of the bears in the recent market action.

Even if the stock does not pull back that much, the last two days indicate that the bulls are losing strength and that the stock is likely to turn around in the short run.

Other Candlestick Patterns

Hanging Man - This tends to come at the top of an uptrend and signals the bulls are losing strength.

Hammer Pattern - This is the same as the handing man pattern only it occurs in a downtrend and signals the stock may turn around.

Three Inside Down – A bearish indicator for the security.

Other Candlestick Patterns