Bearish Three Outside Down Pattern

by · December 31, 2009

BEARISH THREE OUTSIDE DOWN PATTERN (BTODP)
a bearish trend reversal

Characteristics:
1. The market is on an uptrend;
2. A bearish engulfing patter is seen on Day 1 and Day 2; and
3. There is a black stick on Day 3 with a close that is lower than Day 2’s close.

Brief Explanation:
The BTODP is also called the Confirmed Bearish Engulfing Pattern. Day 3 confirms the bearish trend reversal. The reliability of this pattern is high. But it is suggested that there should be a confirmation of black stick with a lower close or a gap down.