26. (BEARISH SQUEEZE ALERT) Bearish Candlestick Patterns - from candlesticker.comBearish

To see the performance of the pattern in your stock exchange in the context of other stock markets please examine the table below. Find your stock market there and see how it ranks among the others. This will give you an idea about the pattern’s strength and reliability and help you in your selling decisions.

BEARISH SQUEEZE ALERT

Definition

This is a three-day bearish reversal pattern. It was developed because of the frequent event where prices can break to the downside following this pattern, especially if the pattern is preceded by a strong upside move.

Recognition Criteria

1. The market is characterized by a prevailing uptrend.
2. A white candlestick appears on the first day.
3. The second and third days each have lower highs and higher lows than the previous day. Their color is not important.
4. The sizes of the bodies of the three days do not matter.

Pattern Requirements and Flexibility

The first candlestick should be a white candlestick. The other two candlesticks can be of any color and length but they should have lower highs and higher lows consecutively.

Trader’s Behavior

What is important about the Bearish Squeeze Alert is that the uptrend has stalled and some plateau or stability has finally arrived.

Sell/Stop Loss Levels

The confirmation level is defined as the body bottom of the last day. Prices should cross below this level for confirmation.

The stop loss level is defined as the higher of the last two highs. Following the bearish signal, if prices go up instead of going down, and close or make two consecutive daily highs above the stop loss level, while no bullish pattern is detected, then the stop loss is triggered.

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