Japanese candlestick - Frying pan bottom
Frying pan bottom
Definition: A frying pan bottom structure is comprised of several Japanese candlesticks. The first candlesticks are bullish or bearish with small bodies. This series of candlesticks should form a rounded bottom. Then, a last candlestick is formed with a bullish gap opening. This is the opposite of a Dumpling top.
Characteristic: A frying pan bottom often forms after a significant drop characterized by several large red Japanese candlesticks.
Significance: A frying pan bottom structure is a reversal pattern, it indicates a reversal in the bullish trend. This reflects a gradual exhaustion of sellers before buyers forcefully regain control.
Note: A frying pan bottom is a major pattern in Japanese candlesticks. It is a powerful structure. However, it is essential not to anticipate its formation and to wait for the bullish gap.
Invalidation: If the bullish gap is filled on the last candlestick, the frying pan bottom structure is invalidated.