Bearish Three Outside Down Pattern

 


BEARISH THREE OUTSIDE DOWN

Type: Reversal
Relevance: Bearish
Prior Trend: Bullish
Reliability: High
Confirmation: Suggested
No. of Sticks: 3

 

Definition:

The Bearish Three Outside Down Pattern is another name for the Confirmed Bearish Engulfing Pattern. The third day confirms the bearish trend reversal.

Recognition Criteria:

1. Market is characterized by uptrend.
2. We see a Bearish Engulfing Pattern in the first two days.
3. Then we see a black candlestick on the third day with a lower close than the second day.

Explanation:

The first two days forms a Bearish Engulfing Pattern, and the third day confirms the reversal suggested by the Bearish Engulfing Pattern since it is a black candlestick closing with a new low for the three days.

Important Factors:

The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.