27. (BULLISH STICK SANDWICH) Candlestick Bullish Patterns - from candlesticker.com

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 buying decisions.

BULLISH STICK SANDWICH

Definition

This pattern has two black bodies with a white body between them. That is why it looks like a sandwich. The closing of both black candlesticks at the same level shows that a support price has been established.

Recognition Criteria

1. The market is characterized by a prevailing downtrend.

2. We see a black candlestick on the first day.

3. A white body that trades above the close of the previous black body follows.

4. The third day is a black day with a close equal to the first day.

Pattern Requirements and Flexibility

The Bullish Stick Sandwich starts with a strong black candlestick, and a white candlestick that opens at the previous close or at a higher level follows it. The white body closes above the black body of the first day. The third day opens with an upside gap but closes exactly at the same level with the first day’s close.

Trader’s Behavior

The market is testing new lows and it produces a black day. The following day unexpectedly opens higher and then trades higher all day, closing at or near its high. This action suggests that the downtrend has reversed and that short traders should be careful. The next day, prices open even higher, which should cause some short covering initially, but then prices drift lower to close at the same price as two days ago. Traders take note of the support price implied by the two same level closes.

Buy/Stop Loss Levels

The confirmation level is defined as the midpoint between the last two closes. Prices should cross above this level for confirmation.

The stop loss level is defined as the lower of the last two lows. Following the BUY, if prices go down instead of going up, and close or make two consecutive daily lows below the stop loss level, while no bearish pattern is detected, then the stop loss is triggered.

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