Japanese candlesticks - Upside gap 2 crows
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Upside gap 2 crows
Definition: The upside gap two crows structure is made up of three Japanese candlesticks. The first is a large bullish candlestick (green) followed by two bearish candlesticks (red). The latter both open on a bullish gap. The last candle forms a bearish engulfing line but its closing must be above the first candlestick’s closing price.
Illustration:
Characteristic: The upside gap two crows structure often forms after a significant increase characterized by several large, green Japanese candlesticks.
Significance: The upside gap two crows pattern is a reversal pattern, it indicates a reversal of the bearish trend. This reflects buyers' uncertainty about the continuation of the bullish trend and a slowdown in the movement. Sellers become more and more active, defend a price level and eventually regain control.
Note: The upside gap two crows pattern is often relevant. The third candlestick of the structure may not form a bearish engulfing line but it must be bearish and close above the first candlestick’s closing level.
Invalidation: If the next candlestick is not bearish or if the opening does not happen in a bearish gap, the upside gap two crows pattern is invalidated.
