Definition
Bullish Upside Gap Three Methods consists of three candles. The first long white candle is followed by another long white candle in the trend’s direction. The third day is a black candle, filling out the gap between the first two days.
- Trend: Continuation
- Expected trend: Bullish
- Previous trend: Bullish
- Reliability: Low
- Type: Bullish
- Number: 3
Recognition
- The market is in an upward trend.
- The first two days are long white candles with a gap between them.
- The third day is a black candle with an opening price in the range of the second day’s candle.
- The third day’s candle fills out the gap between the first two days.
Interpretation
The second day is started by an upward gap due to the buying pressure and the low number of short positions in the accelerating ascending trend. The gap is filled on the third day, but the price does not sink below the trendline because of the profit realisation. The trading volume is usually low on the third day. The trend must continue, but it is recommended to wait for confirmation.
Important factors
Bullish Upside Gap Three Methods formation is similar to Bullish Upside Tasuki Gap formation. However, in the Bullish Upside Tasuki Gap formation, the gap is not filled out by the third candle. The formation has a medium reliability, verification from another source is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
