Definition
Bearish Three Line Strike consists of four candles. Three consecutive black candles are followed by a long white candle with a closing price close to the first candle’s opening price. If the inclining trend was powerful, the trend must continue.
- Trend: Continuation
- Expected trend: Bearish
- Previous trend: Bearish
- Reliability: Low
- Type: Bearish
- Number: 4
Recognition
- The market is in a downward trend.
- The first three days are three consecutive black candles with decreasing closing prices.
- The fourth day is a white candle with an opening price below the previous day’s closing price. Its closing price is close to the first candle’s opening price.
Interpretation
Bearish Three Line Strike is a typical formation in inclining trends. The opening prices are moving in the trend’s direction. Therefore, short position owners don’t leave their positions. On the last day, the share price returns to the beginning of the pattern. If the inclining trend was powerful, the trend must continue.
Important factors
To make sure the trend is reversed, a confirmation on the fifth day is needed. The confirmation could come from a black candle with a downward gap or a lower closing price.
