(Bullish)
Three Outside Up |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bullish
Prior Trend of Candlesticks: Bearish
Reliability of Candlesticks : 2nd Grade
Confirmation of Candlesticks: Reliable
Candlestick Patterns Key Reference |
DESCRIPTION
(Bullish) Three Outside Up pattern is a confirmation of a bottom reversal after a Bullish Engulfing pattern is formed.
The third candlestick act as a confirmation when the it closes higher than the previous two candlesticks.
PATTERN RECOGNITION
1. (Bullish) Three Outside Up pattern can be identified by a downtrend followed by a bottom reversal.
2. Refering to above diagram, firstly we will see a small bearish candlestick then the second candlestick formed a Bullish Engulfing pattern.
3. Then we see the third bullish candlestick with a higher close than the second candlestick which act as a confirmation of bottom reversal.
EXPLAINATION
The first small candlestick implies that a trend is weak and lost its momentum.
The Bullish Engulfing pattern is a reliable indication to indicate a bottom reversal signal and a change in sentiment.
The third candlestick with a higher close than the previous two candlesticks confirm the bottom reversal.
The 2nd grade reversal patterns are reliable group of reversal patterns.
POINT TO NOTE
The reliability of (Bullish) Three Outside Up pattern is very high, but a confirmation is still required in a form of a bullish candlestick which a higher close 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 |
