Bearish downside gap three methods

Type: Continuation

Relevance: Bearish

Prior Trend: Bearish

Reliability: Medium

Confirmation: Suggested

No. of Sticks: 3

Two long black candlesticks with a downward gap between them appear. They are followed on the third day with a white candlestick, which manages to close the gap between the first two. This should be seen as a support for the downward trend.

Recognition Criteria:

1. Market is characterized by downtrend.

2. We see two long black candlesticks with a gap between them in the first and second days.

3. Then we see a black candlestick on the third day characterized with an opening within the body of the second day.

4. The body of third day candlestick is white and it fills the gap between the first two days.

Explanation: 

The Bearish Downside Gap Three Methods Pattern appears when the market is moving strongly downward. Downward move is extended further by another day showing a gap in the direction of the downtrend. The third day opening is well within the body of the second day, and it manages to completely fill the gap. This gap-closing move may be interpreted as a support level for the current downtrend.

Important Factors:

This Bearish Downside Gap Three Methods Pattern is a simple pattern with strong similarity with the Bearish Downside Tasuki Gap Pattern. The only difference is that in the Bearish Downside Tasuki Gap Pattern, the gap between the first two days is not filled by a third day body.

A confirmation of the trend is required in the form of a black candlestick, a large gap down or a lower close on the next trading day to be sure that downtrend is continuing.