Finally, we are in the last chapter of the Candlestick Patterns: 7 Strong Bullish Reversal Signal series in where we discuss the strong bullish candlestick patterns by using technical analysis point of view. So far, we have learned five candlestick’s strong bullish reversal signals which are Bullish Abandoned Baby, Bullish Piercing Line, Bullish Morning Star, Bullish Three Outside Up, and Bullish Three Inside Up. Having this five strong candlestick’s bullish reversal signal is surely a big help in our stocks analysis activities.
And it will be better if we have the entire seven candlestick’s strong bullish signal as our stocks trading weapon. So, Let’s complete this strong candlestick patterns post series with two more of strong candlestick’s bullish reversal signal which are The Bullish Concealing Baby Swallow Candlestick Patterns and Bullish Three White Soldiers Candlestick Patterns.
Technical Analysis of Bullish Concealing Baby Swallow Candlestick Patterns
Bullish Concealing Baby Swallow is the four candlesticks patterns in where needs four candlesticks to form the chart pattern. This bullish signal is quite unique and interesting since consist of only the black candlesticks. It is interesting to find out how the entire black candlestick can form a bullish signal, right? Firstly, let’s take a look of this Bullish Concealing Baby Swallow Candlestick Patterns from technical analysis point of view as below:
From picture above, we can see that there are four black candlesticks that form this bullish candlestick patterns. The chart pattern can be happened in various time but for sake of simplicity, let’s assume the above Bullish Concealing Baby Swallow Candlestick Patterns is happened in daily basis. In the first day and second day, there are two solid black candlesticks which means that the sellers powerfully rule the market during the first day and the second day.
In the third day, there is a black candlestick with tiny body and long up tail (a inverted hammer indeed). Also that, there is a gap between the second day closing price and the third day opening price. This condition means that the seller try to push the market down fiercely in the opening but the buyers do counter-attack during the trading which shown by the long tail that reach the half of the second day candlestick’s body. However,finally, the sellers still win the battle (in the market closing time). That’s why the price is closed in below of the opening price. But, it is only slightly lower so the buyers power is already significant in this third day.
In the fourth day, there is a solid black candlestick which engulf the third day black candlestick. The fourth day’s opening price is far below the third day’s opening price and almost reach the second day’s opening price. However, the closing price is still in below of the third day’s closing price. This condition means that there is a fierce battle between sellers and buyer during this fourth day. Right after the opening, the buyers rule the market which shown by the higher opening price.
However, in the end, the sellers do a strong counter-attack which shown by the lower closing price. If it is not a four candlestick patterns, we may think this is a strong bearish (downtrend) signal. But, it is an unique candlestick patterns which formed by four candlesticks so the story is difference in here. It is indeed a strong signal for bullish reversal. It is because these entire chart pattern tells that buyers power is increase day by day (from the last two days indeed) so the sellers will be in high alarms.
In this situation, the sellers have high possibility to close their selling position and start to buy the stocks in the next day to ride the uptrend with the other strong buyers. From the market’s stocks analysis experience, the possibility is very high so this Bullish Concealing Baby Swallow Candlestick Patterns is included as one of the strong bullish candlestick patterns which do not need confirmation for candlestick itself or other Technical Analysis (TA) indicators.
However, since it is the entire black candlesticks, I suggest to wait a white candlestick as confirmation at least before we start to buy the stocks. It is good if the white candlestick is closed in above of the fourth day’s opening price as like in below picture:
Technical Analysis of Bullish Three White Soldiers Candlestick Patterns
Three White Soldiers is a three candlesticks patterns in where needs three candlesticks to form the chart pattern. This strong bullish signal is formed by three solid white candlesticks during the certain time range. In my opinion, this Three White Soldiers candlestick patterns is the most natural bullish signal from the entire seven strong candlestick bullish reversal signals. It is three solid white candlesticks indeed. Here the chart pattern:
From above image, we can see there are three solid white candlesticks that form the chart pattern. This pattern can be happened in various time range but for sake of simplicity, let’s assume the pattern is happened in daily basis. In first day – after the downtrend –, there is a solid white candlestick which means the buyers rule the market powerfully. In the second day, there is another solid candlestick with higher opening price and closing price. It means that the sellers even stronger than the first day and continue to rule the market.
In the third day, there is another solid white candlestick with the higher opening and closing price. It means that the sellers stronger than the second day and still continue rule the market. In this condition, the entire traders psychologically in uptrend mode and only buy, buy, and buy the stocks which means the market has high possibility in the strong uptrend in long-term. There is a possibility that the correction take a place in the next day (fourth day) but after it, usually, the market is up in full swing.
So, if find this Bullish Three White Soldiers candlestick patterns after a long down trend, it is surely the time to buy the stocks and do not need to wait for technical analysis’ confirmation.
Having beneficial stocks trading everyone!