Abandonded Baby - Candlesticks Reversal Patterns
******** Candlestick Reversal Pattern Probability High ***********
Bullish Reversal Pattern
After an upward trend a Doji appears after a gap upwards. A red candlestick apears after a gap downwards leaving the Doji Up in the air. This is why this Doji is called an Abandoned Baby. It differs from the Evening Star as neither the previous candlestick or the next make contact with the Doji.
Characteristics
After an upward trend a gap upward occurs as a few buyers have orders in way higher than the trend moving price. All others pull out and stay neutral causing little price action. Sellers enter with low offers that get filled and buyers stay out causing teh next candlestick to be red.
The Abandonded Baby Doji can be Red or Green but Red is a little better.
Confirmation
In this case confirmation has already occurred. You may be a conservative trader and wait for another red candlestick to form.
Trading Psychology
1. It is a sign of trend indecisiveness and a weakness reveals itself at the upper level. Buyers did not find this level appealing and neither did sellers so attantion must be paid to it as it may become a level of resistance you can play off.
2. This is also a level you may want to cash in Long at if there is a downward trend and you jump in when the stock turns around again.
|
