BULLISH RISING
THREE METHODS
| Type: | Continuation |
| Relevance: | Bullish |
| Prior Trend: | Bullish |
| Reliability: | High |
| Confirmation: | Suggested |
| No. of Sticks: | 5 |
The Bullish Rising Three Methods Pattern is a continuation pattern representing a pause during a trend without causing a reversal. The pattern is characterized by a long white candlestick followed by three small bodies in three consecutive days. The small bodies represent some resistance to previous uptrend and they may even trace a short downtrend. These three reaction days usually have black candlesticks but the bodies remain within the high and low range of the first day's white candlestick. The pattern is completed by a white candlestick on the fifth day, opening above the close of the previous day and closing at a new high. The small downtrend between the two long white candlesticks represents a break during the uptrend. The upward trend then resumes and continues.
Recognition Criteria:
1. Market is characterized by uptrend.2. We see a long white candlestick in the first day.
3. Then we see small real bodies defining a brief downtrend but staying within the range of the first day on the second, third and fourth days.
4. Finally we see a long white candlestick on the fifth day opening above the close of the previous day and also closing at a new high.
Explanation:
The Bullish Rising Three Methods Pattern typically represents a rest in the market action. This may be used to add new positions by longs. The pattern is the reflection of doubts about the ability of the trend to continue. This doubt may increase because of small-range reaction days. However, given the fact that a new low cannot be made, the bullishness is resumed and new highs are set quickly.
Important Factors:
The high-low range includes the shadows.
The reliability of this pattern is very high, but a confirmation in the form of a white candlestick with a higher close or a gap-up still is suggested.