Definition
Bullish Separating Lines formation is a black candle on the first day followed by a Bullish Marubozu Opening. The opening price on the next day starts with a small gap above the previous day’s opening price and the share price reaches a new high.
- Trend: Continuation
- Expected trend: Bullish
- Previous trend: Bullish
- Reliability: Moderate
- Type: Bullish
- Number: 2
Recognition
- The market is in an upward trend.
- The first day is a long black candle.
- The second day is a white candle, where opening price is similar to the previous day’s.
- The second day is a Bullish Marubozu Opening.
Interpretation
Despite the trend being ascending, the formation is opened by a black candle (with relatively long body). It may worry investors owning long positions. It might even mean a change in the market behaviour. However, the second day’s opening price is similar to the first day’s. There is a new maximum formed and the trend must continue.
Important factors
The second candle is a Bullish Marubozu Opening. To make sure the trend is continued, a confirmation on the third day is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
