If today's price action is any indication, it appears the Santa Claus rally is happening this year. That means that many stocks that are already extended after last week's rally will become even more extended. As a result, the Side-by-Side White Lines pattern may be a pattern is Sant's bag of stocks that are being bid this week.
Side-by-Side White Lines Basics
Overall Rating: 3 Star
Directional Bias: Bullish Continuation
Number of Candles: 3
Frequency Rating: 1 Star
Pattern Description:
This pattern occurs within an uptrend. The first candle of the formation is a tall open candle as the price continues its advance. The price gaps higher the next session and closes higher. The next candle repeats the pattern of the previous candle forming similar size candles with similar closing prices.
Volume Description:
Above average volume during the formation of the pattern and increasing volume as the price closes higher increases performance.
Statistical Notes:
Taller side-by-side patterns with long upper shadows that occur in a neutral or bullish primary trend typically perform better than shorter patterns. A confirmation of a higher close increases performance.
Measuring Technique:
Add the trading range of the pattern to the closing price of the last candle.
Conclusion
You may be looking for patterns to trade this year's holiday period. While there may not be a set playbook for this type of market, there is a historical inclination to rally over the next seven days. As a result, you may want to look for a rising market coupled with bullish chart formations. That may mean a relatively uncommon Side-by-Side White Lines candle pattern may have a chance to sparkle in the current market holiday environment.
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