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To evaluate the performance of the pattern in your stock exchange within the context of other global markets, please refer to the table below. Locate your stock market to see its ranking among others. This will provide insights into the pattern’s strength and reliability, aiding you in your buying and selling decisions.
BULLISH STICK SANDWICH
Definition
This pattern consists of two black candlesticks with a white candlestick between them, resembling a sandwich. The fact that both black candlesticks close at the same level indicates that a support price has been established.
Recognition Criteria
1. The market is currently defined by a dominant downward trend.
2. We see a black candlestick on the first day.
3. A white body that trades above the close of the previous black body follows.
4. The third day is a black day with a close equal to the first day.
Pattern Requirements and Flexibility
The Bullish Stick Sandwich pattern begins with a strong black candlestick. This is followed by a white candlestick that opens at the previous close or at a higher level, and closes above the black body of the first day. On the third day, the market opens with an upside gap but closes exactly at the same level as the first day’s close.
Trader’s Behavior
The market tests new lows, resulting in a black candlestick. The following day, the market opens unexpectedly higher and trades higher throughout the day, closing at or near its high. This suggests a potential reversal of the downtrend, signaling caution for short traders. On the next day, prices open even higher, prompting some short covering initially, but then drift lower to close at the same level as two days ago. Traders observe the support price indicated by the two identical level closes.
Buy/Stop-Loss Levels
The confirmation level is defined as the midpoint between the last two closes. For confirmation, prices should move above this level.
The stop-loss level is set at the lower of the last two lows. After a BUY signal, the stop-loss is triggered if prices decline instead of rising and either close below the stop-loss level or record two consecutive daily lows below it, without any bearish pattern being detected.