Japanese candlesticks - Abandoned baby
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Bullish abandoned baby
Definition: The bullish abandoned baby’s structure is made up of three Japanese candlesticks. The first is a bearish candlestick (red) followed by a doji that forms after a bearish gap. The last candlestick is bullish and must open on a bullish gap. The doji’s upper wick must not reach the lowest point of the other two candlesticks, otherwise it is a morning star.
Illustration:
Characteristic: The bullish abandoned baby’s structure often forms after a significant drop characterized by several large red Japanese candlesticks.
Significance: The bullish abandoned baby is a reversal pattern, it indicates a bullish reversal. This reflects a tour de force by buyers, firstly to contain the bearish pressure and secondly to make the sellers capitulate.
Note: The bullish abandoned baby is a very rare pattern. To be valid, the doji’s closing price has to be very close to its opening price.
Invalidation: If the next candlestick is not bullish, the bullish abandoned baby pattern is invalidated.
Bearish abandoned baby
Definition: The bearish abandoned baby’s structure is made up of three Japanese candlesticks. The first is a bullish candlestick (green) followed by a doji that forms after a bullish gap. The last candlestick is bearish and opens on a bearish gap. The doji’s lower wick must not reach the highest point of the other two candlesticks, otherwise it is an evening star.
Illustration:
Characteristic: The bearish abandoned baby’s structure often forms after a significant increase characterized by several large green Japanese candlesticks.
Significance: The bearish abandoned baby is a reversal pattern, it indicates a reversal of the bearish trend. This reflects a tour de force by sellers, firstly to contain the bullish pressure and secondly to make buyers capitulate.
Note: The bearish abandoned baby is a very rare pattern. To be valid, the doji’s closing price has to be very close to its opening price.
Invalidation: If the next candlestick is not bearish, the bearish abandoned baby pattern is invalidated.
