Bullish Concealing Baby Swallow Pattern
BULLISH CONCEALING BABY SWALLOW PATTERN (BCBSP)
two consecutive Black Marubozu
1. Market is on a downtrend;
2. We see two consecutive Black Marubozu on Day 1 and Day 2;
3. On Day 3, we see a black stick opening with a downward gap but trading into the body of Day 2 and characterized by a long upper shadow; and
4. On Day 4, there is another Black Marubozu that completely engulfs the candlestick (including the shadow) on Day 3.
The two Black Marubozu show that the bears are happy since the downtrend is continuing. On Day 3, there is a downward gap that further confirms the trend. Prices on Day 3 then start going above the close of the prior day casting doubts on the bearishness of the situation. Day 4 shows a higher gap in the opening. After this opening, prices again go down closing at a new low. This is a good chance for the short sellers to cover their positions.
1. The pattern is highly reliable, but a confirmation is suggested (through a white stick with a higher close or a gap-up).