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Thursday, June 18, 2009

Bullish Three Inside Up Pattern

Bullish three inside up is a bullish trend-reversal candlestick pattern indicating the end of an existing downtrend and the start of a new uptrend. It is a three candlestick pattern, regarded as the ‘confirmation of bullish harami candlestick pattern’. This is because the first two candlestick of three inside up pattern forms the bullish harami candlestick, which is a moderately reliable bullish pattern. The third candlestick confirms the start of new uptrend.


The requirements of bullish three inside up pattern include,
  • The pattern should form at the end of a bearish trend.
  • The first day is a bearish day characterized by a long bearish (black or colored) candlestick.
  • The second day is a bullish day, where the market opens a gap above first day candlestick and then closed within the real-body of first day candlestick; this forms the bullish harami pattern.
  • The third day is also a bullish day, where the prices close above the first day candlestick.
The confirmation of bullish harami pattern on day three indicates that buyers are now taking control of the trend. Prices are now expected to go up. Three inside up pattern mainly helps day traders and other short-term traders as the pattern is frequent in the morning.

Bullish three inside up candlestick is considered as a highly reliable formation, and the reliability increases with increase in real-body and trading volume of third day. Usually no other confirmation is suggested.

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posted by NobleTrading at 8:36 AM

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