Bearish downside tasuki gap

Type: Continuation

Relevance: Bearish

Prior Trend: Bearish

Reliability: Medium

Confirmation: Recommended

No. of Sticks: 3

The pattern involves two long black candlesticks with a downward gap between them during a downtrend. Pattern is completed by a third day white candlestick partially closing the gap between the first two. The white candlestick may be the result of investors temporarily taking advantage of the low buying price. However we expect the trend to continue in the downward direction.

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 white candlestick characterized with an opening within the body of the second day.

4. The body of third day candlestick closes into the gap but does not fully close the gap.

Explanation: 

The Bearish Downside Tasuki Gap Pattern appears in a strongly downward moving market. The downward move is extended further by another day, which displays a gap in the direction of the downtrend. The third day has an opening well into the body of the second day and it partially fills the gap. However the gap is not filled or closed, so previous downward trend continues.

Important Factors:

The Bearish Downside Tasuki Gap Pattern is a rare formation.

The real bodies of the last two candlesticks in the Bearish Downside Tasuki Gap Pattern should be about the same size.

This Bearish Downside Tasuki Gap Pattern is a simple pattern quite similar to the Bearish Downside Gap Three Methods Pattern. The only difference is that in the Bearish Downside Gap Three Methods Pattern, the gap that is made between the first two days is filled by the third day.

A confirmation is recommended in the form of a black candlestick, a large gap up or a lower close on the next trading day to be sure that downward trend will continue.