With today’s huge reversal, a lot of stocks are establishing support over the past few days. That means today may be confirming the short-term reversal in the trend. With that in mind, it’s a good time to learn the Three inside Up candle pattern may be popping up a lot today.
Let’s take a closer look at this candle pattern.
Rating: 4 Star
Directional Bias: Bullish Reversal
Number of Candles: 3
Frequency Rating: 3 Star
Pattern Description:
The Three inside Up pattern occurs at the end of a downtrend. The pattern starts with a tall, closed candle followed by a small bodied open candle whose body falls within the range of the body of the previous candle. The pattern completes with a higher close the next day.
Volume Description:
Rising volume during the formation of the Three Inside Up pattern with higher volume on the breakout increases performance.
Statistical Notes:
Taller Three inside Up patterns with long bodies occurring in a neutral or bullish primary trend increase performance.
Measuring Technique:
Add the trading range of the Three Inside Up pattern to the close of the last candle.
Conclusion
It can be hard to be confident to say that a stock has found support. However, identifying candle patterns like the Three Inside Up can help with confidence and consistency in your trading. Understanding the effectiveness of a pattern can help identify how potentially reliable the signal is as well.
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