Definition
Bullish Unique Three River Bottom is a very rare trend reversal formation. The first day is a large, black candle, followed by another black candle with a higher closing price. The third candle is white and has a small body. The last candle signals the decreased seller pressure and the appearance of the buyers on the market.
- Trend: Reversal
- Expected trend: Bullish
- Previous trend: Bearish
- Reliability: Moderate
- Type: Bullish
- Number: 3
Recognition
- The market is in a downward trend.
- The first day is a long black candle.
- The second day is a large, black Hammer.
- The shadow of the second day sinks to a new minimum.
- The third day is a short white candle closing below the second day’s closing price.
Interpretation
The first two candles are black and the first candle covers the body of the second candle. The second day indicates the weakening of the trend, the investors pull the prices back, close to the opening price. The third candle is white, but the prices are still held down, no new minimum is formed. Such formation increases the possibility of an upcoming ascending trend.
Important factors
To make sure the trend is reversed, a confirmation on the fourth day is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
