![]() ![]() ![]() Can You See The Bullish Gap On Day 3?ĭay 3 began with a bullish gap up. Bears were unable to continue the large decreases of the previous day they were only able to close slightly lower than the open. However, Day 2 was a Doji, which is a candlestick signifying indecision. Day 2 continued Day 1’s bearish sentiment by gapping down. The chart below of the S&P 400 Midcap exchange traded fund (MDY) shows an example a Morning Star bullish reversal pattern that occured at the end of a downtrend:ĭay 1 of the Morning Star pattern for the Midcap 400 (MDY) chart above was a strong bearish red candle. But it is Day 3 that holds the most significance.ĭay 3 begins with a bullish gap up, and bulls are able to press prices even further upward, often eliminating the losses seen on Day 1. Generally speaking, a bullish candle on Day 2 is viewed as a stronger sign of an impending reversal. The candlestick on Day 2 is quite small and can be bullish, bearish, or neutral (i.e. However, bears do not push prices much lower. It is clear from the opening of Day 2 that bears are in control. The second day begins with a bearish gap down. On the first day, bears are definitely in charge, usually making new lows. The first part of a Morning Star reversal pattern is a large bearish red candle. Small Bullish or Bearish Candle (Day 2). ![]()
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