Concealing Baby Swallow |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bullish
Prior Trend of Candlesticks: Bearish
Reliability of Candlesticks : 4th Grade
Confirmation of Candlesticks: Rare
Candlestick Patterns Key Reference |
DESCRIPTION
Concealing Baby Swallow pattern is a four bearish candlesticks formation in a downtrend. Pattern is identified by two consecutive Bearish Marubozu.
Note on the third candlestick show bearish inverted hammer at the bottom of a downtrend implies the end of downtrend.
Then the following candlestick is followed by a gap up but the immediately trends down and closes just below the inverted hammer.
However that implies to sellers that bullish reversal is possible giving a signal to cover their short position.
PATTERN RECOGNITION
1. The Concealing Baby swallow pattern is identified by a downtrend.
2. First two candlesticks are Bearish Marubozu.
3. Then we will see a bearish candlestick open with a downward gap and rally up but with no strength to hold and trend down again forming a long upper shadow (inverted hammer).
4. Finally we will see another Bearish Marubozu on the fourth candlestick which engulfs the previous bearish candlestick completely including the shadow.
EXPLAINATION
The first two Bearish Marubozu indicate that the downtrend is more favored towards the bear.
On the third candlestick, we can see that the price open with a gap down and then trend up within the previous candlestick body but could not hold at the upside and trend down again which form a long upper shadow (inverted hammer).
On the fourth candlestick, we can see that the price open higher than the previous candlestick (inverted hammer), however the price go down again and close at a new low.
This give a signal to short sellers to cover their short position.
The 4th grade reversal patterns are rare reversal patterns that may require confirmation in the next session.
POINT TO NOTE
The reliability of Concealing Baby swallow pattern is very high, but still a confirmation with a following bullish candlestick which closes higher or a gap-up 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 |
