Bearish Patterns

Pattern Index   Bullish Patterns

Abandoned Baby in Uptrend

 

In an uptrend, a white candle is followed by a Doji that gaps above it completely. The next day is a black candle that gaps completely below the Doji.

 

Confirmation: Not Required 

Bearish Engulfing

 

 

In an uptrend, a small white candle with low volume is followed by a much higher volume black candle that engulfs the body of the previous white candle. 

 

Confirmation: Required (See Three Outside Down)

 

Bearish Harami

 

 

In an uptrend, a long white candle with above average volume is followed by a black candle that gaps down, closing within the body of the first day. Volume for the black candle is lower than for the white candle.

 

Confirmation: Required (See Three Inside Down)

 

Breakdown

This is an example of a breakdown pattern, similar to the Breakout one, that is included to show that not only traditional candlestick patterns can be searched for.  It scans items that have been trading relatively flat for the previous 20 bars and then have an above-average-length black bar that closes near its low and whose low is lower than the lowest low of the previous 20 bars.

 

Confirmation: Not Required 
 

Counter Punch Short

This is a contrarian pattern described by Thomas Stridsman in his book 'Trading Systems and Money Management' that is shown by him to be very profitable.  He also includes additional rules on position sizing and stop loss methods.  The pattern has been modified from his version to include confirmation, i.e., the current bar must close down and also close lower than the previous day's close.  The pattern basically looks for stocks that have been trending too long and so are ready for a pullback.  The pattern Stridsman describes can be formulated as 'C>C1 AND C1>C2 AND C>C5 AND C5>C10', which we have modified to 'C1>C2 AND C2>C3 AND C1>C6 AND C6>C11 AND BC AND C<C1' for confirmation.

 

Confirmation: Not Required 
 

Dark Cloud Cover

 

 

In an uptrend, a long white candle is followed by a a black candle that opens above the high of the prior day and closes below the midpoint of that day.

 

Confirmation: Not Required 

 

Dave Paxton Bearish Star Confirmation

 

 

An example of a user-defined scan from Dave Paxton of Y2Kseminars.com.  It's purpose is to confirm a Bearish (Evening) Star and looks for either of two sequences:

(a) A white candle is followed by a bar that gaps above it, closes at or above the previous close and has a high that is the highest of the last 5 bars. This bar is followed by a black candle that closes below the open of the starting white bar.

(b) A white candle is followed by a bar that gaps above it and closes at or above the previous close. This bar is followed by a black candle that opens at or below the previous close. The next (last) bar closes below the open of the original white bar.

  

Confirmation: Not Required 

 

Evening Doji Star

 

 

In an uptrend, a long white candle is followed by a Doji that gaps up. This is followed by a black candle that opens below the Doji.

 

Confirmation: Not Required 

 

Evening Star

 

 

In an uptrend, a long white candle is followed by a day that gaps above it. This is followed by a black candle that gaps below the day before it and closes below the close of the first day.

 

Confirmation: Not Required 

 

Falling Three Methods

 

 

In a downtrend, a long black candle is followed by three white candles that open and close successively higher, but not higher than the open of the first long black candle. The last day is a black candle that closes below the close of the first black candle.

 

Confirmation: Not Required 

 

Gary Smith Short

This is a breakdown pattern described by Gary Smith of TheStreet.Com in Technical Analysis of Stocks & Commodities Magazine, October 2000. It is included as an example of a non-traditional candlestick pattern.

It scans only items with a current price greater than 20 and an average daily volume greater than 500,000. It then finds items whose current close is lower than the lowest close of the previous 5 bars and is also at least one point lower than the previous day's close. Finally, the breakdown day's volume must be at least 50% greater than the average daily volume over the previous 50 bars.

 

Confirmation: Not Required 
 

Hanging Man

 

 

In an uptrend, a small body appears near the top of its daily range. The lower shadow should be at least twice as long as the body.

 

Confirmation: Required 

 

Identical Three Crows

 

After an uptrend, three similar black lines open and close successively lower. The second day opens near the close of the first and the third day opens near the close of the second.

 

Confirmation: Not Required 

Kicking Bearish

 

A black marubozu gaps under a white marubozu. The prior trend is not important.

 

Confirmation: Not Required 

Lowest Low

 

 

Lowest-Low patterns are included for 25, 50 and 100 day lookback periods.  In editable pattern mode you can define alternate lookback periods. These patterns are most useful as prescans, to filter your list down to the more-promising ones before running other scans on them.

 

Meeting Lines in Uptrend

 

In an uptrend, a long white candle is followed by a long black candle that closes near the close of the previous day.

 

Confirmation: Suggested 

Tasuki Gap in Uptrend

 

 

In an uptrend, a white candle gaps over a white candle. The next day opens down within the body of the previous white candle and closes a part, but not all, of the gap between the first and second bars.

 

Confirmation: Recommended - NB This pattern is normally rated Bullish Continuation, but tends to be Bearish for a few bars.

 

Three Black Crows

 

After an uptrend, three similar black lines open and close successively lower.

 

Confirmation: Not Required 

Three Inside Down

 

 

In an uptrend, a long white candle with above average volume is followed by a small black candle of lower volume that is engulfed by the previous day. The third day is also a black candle that closes lower than the first day, confirming the trend.

 

Confirmation: Not Required 

 

Three Outside Down

 

 

In an uptrend, a small white candle with low volume is followed by a much higher volume black candle that engulfs the body of the previous white candle. This is followed by another black candle that closes below the close of the prior black candle.

 

Confirmation: Not Required 

 

Upside Gap Two Crows

 

In an uptrend, a long white candle is followed by a black candle that gaps up. This is followed by another black candle that engulfs the previous, but still closes above the close of the first white candle.

 

Confirmation: Suggested