Definition
Bullish Three Line Strike consists of three consecutive white candles, followed by a long black candle at the end of the formation. Its closing price is lower than the first white candle’s opening price. If the increase was powerful, the trend must continue.
- Trend: Continuation
- Expected trend: Bullish
- Previous trend: Bullish
- Reliability: Low
- Type: Bullish
- Number: 4
Recognition
- The market is in an upward trend.
- Three white candles are formed with increasing opening and closing prices.
- On the fourth day, the opening price is higher than the previous day, but the share closes below the first day’s closing price.
Interpretation
Bullish Three Line Strike is typical for ascending trends, as the first three days show it. The fourth day still opens in the direction of the trend. However, the share price starts to decrease do to the profit realisation effect. This movement crushes the first three days. If the ascending trend is powerful enough, then only profit realisation happened which can strengthen the continuation of the trend.
Important factors
To make sure the trend is continued, a confirmation on the fifth day is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
