Downside Tasuki Gap

Swing Trading, A Scientific Approach. Online Option Trading

The downside tasuki gap is a bearish candlestick pattern. It consists of three different days and will occur during a downtrend.

The first candlestick is a bearish day. This day the bears drive the stock lower. The second day the weakness will continue as the security gaps down and opens lower and moves even down from the open forming another bearish candlestick.

The 3rd and final day of this pattern the security opens up higher than the close of the last day. From here the candlestick moves higher. This candlestick should not fill the gap left between the first and second candlestick.

Why is this important? There is a belief among some traders that a gap will always get filled. If the stock rallied but was unable to fill the gap that could mean there was not enough buyers to push the stock to fill it.

Here is an example of how a downside tasuki gap will appear.