(Bearish)
Advance Block |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bearish
Prior Trend of Candlesticks: Bullish
Reliability of Candlesticks : 3rd Grade
Confirmation of Candlesticks: Reliable
Candlestick Patterns Key Reference |
DESCRIPTION
The (Bearish) Advance Block pattern is similar to the bullish Three White Soldiers pattern. The weakness is shown at the third smaller candlestick.
Each candlesticks is weaker than the preceding candlestick which suggest the bull is losing strength and a reversal is possible.
PATTERN RECOGNITION
1. (Bearish) Advance Block pattern can be identified by an uptrend.
2. Refering to above diagram, we will see three long bullish candlesticks adjacently formed with a higher closes consecutively.
3. Each candlesticks open within the range of the preceding candlestick's real body.
4. Then the third candlestick opens near the second candlestick's close.
5. Each candlestic get smaller than preceding candlestick's body.
EXPLAINATION
If the second and third candlestick (especially the third candlestick) show signs of weakening, that means the bull lose it's strength and buyers must consider to protect their position.
Long need to be careful about the (Bearish) Advance Block pattern during a mature uptrend.
Sign of weakening is a progressively smaller candlestick's real body or relatively long upper shadows at the last two bullish candlesticks.
The 3rd grade reversal patterns are reliable group of reversal patterns which may require confirmation in the next session.
POINT TO NOTE
The bull is losing its upward strength is identified by the long upper shadows on the second and third candlesticks.
The (Bearish) Advance Block pattern is normally not considered as a top reversal pattern but it has potential of meaningful price decline. This pattern is more important at higher price levels.
This pattern can be used to liquidate long positions but it is too early for short positions.
A confirmation on the fourth day is required to show that the uptrend has reversed in a form of a bearish candlestick which a lower close or a large gap down is suggested.
CANDLESTICK PATTERNS KEY REFERENCE
Irrespective of Color (Can be bullish or bearish) |
Uptrend |
Consolidation |
Downtrend |
ANTICIPATED DIRECTION OF TREND
Lighter Arrow = Lower Probability
Solid Arrow = Higher Probability
More Likely to go sideway, Less likely to rally
|
More likely to rally, Less likely to go sideways
|
More likely to go sideway, Less likely to fall
|
More likely to fall, Less likely to go sideways |
