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Definition

 

Bearish Breakaway formation signals the weakening of the ascending trend. The black candle on the last day confirms this weakness, as it does not fill the gap before itself. The formation can only give short-term signals.

  • Trend: Reversal
  • Expected trend: Bearish
  • Previous trend: Bullish
  • Reliability: Low
  • Type: Bearish
  • Number: 5

Recognition

  • The market is in an upward trend.
  • The first day is a long white candle.
  • The second day is also a white candle, leaving a gap behind.
  • Bullish behaviour is continued on the third and fourth day. The share always closes on new maximums.
  • The fifth day is a long black candle, closing in the gap between the first two candles.

Interpretation

The momentum of the increase visibly decreases. The fifth candle closes in the gap between the first two days. The trend seems to reverse, but trading should be executed only in short-term.

Important factors

The candle on the sixth day can confirm the reversal. The confirmation could come from a black candle with a downward gap or a lower closing price.