Side by Side White lines
This particular pattern consists of three different candlesticks. The first candlestick is simply a large down day. The second candlestick the stock gaps down and attempts to push its way back up. The third day of the pattern the stock opens down, close to where the second candlestick opens. It also tries to rally but does not make much, if any more success than the second. This day signals a downside. Why are the side by side white lines bearish signals? When the stock first falls it shows that there was added selling pressure to the security. The first response of the bulls is to try to push the stock higher, yet they fail to regain lost territory. In the third day the bulls try to regain that territory again, but fail. As the bulls attempt and fail to make a big rally twice in a row it shows that the bulls simply are not strong enough to push the stock up and higher. The selling pressure is just too large. 
Tip If the third candle opens higher than the second and makes a higher run then the second it could actually mean the bulls are gaining strength.An aggressive trader would consider this a sell signal after the 3rd day. A more conservative trader may combine it with other indicators and may even wait for confirmation on the third day of trading. Other Candlestick Patterns Candlestick patterns can be a great way to predict the short term movements of the stock. Here are a few other patterns to look into. Bearish Advance Block - A bearish Signal consisting of 3 separate days. Bullish Engulfing Pattern - A common bullish signal. Dark Cloud Cover - A short term bearish signal. |
