Bearish Deliberation Pattern
BEARISH DELIBERATION PATTERN (BDP)
the bull who is temporarily exhausted
1. Market is on an uptrend;
2. There are long white bodies in the first 2 days;
3. Day 2 has a higher close than Day 1, Day 3 opens near Day 2’s close; and
4. Day 3 is typically a short white stick, a spinning top or a star that gaps over Day 2.
The BDP appears after a sustained upward movement. It proposes that the rally is losing strength and a possible reversal. This is proof that strength of the bull is temporarily exhausted.
The pattern is a derivative of the Bearish Three White Soldiers Pattern. The BDP shows a weakness similar to that of the Bearish Advance Block Pattern (it becomes weaker in a short time). But in the BDP, the weakness happens all at once on Day 3.
1. The last small white stick may become a star
2. The BDP has the potential to precede a meaningful price decline
3. A confirmation on Day 4 is needed to ensure that the uptrend has reversed.