Double Wrapping / 両包み線
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A three-candlestick pattern where the first and third large candles sandwich the small second candle. The first and third large candles often have opposite directions, suggesting a directional shift. The third large candle's direction tends to indicate the subsequent trend direction, but confirmation is needed.
After the third large candle is confirmed, enter in the direction of the third candle. Short if the third is bearish, long if bullish. Waiting for confirmation on the next candle is safer.
Project the range of the third large candle from its close in the breakout direction to determine the price target. Or target the nearest support/resistance line.
Place a stop-loss slightly beyond the open of the third large candle (the end opposite to the entry direction).
Volume is typically high on the first and third large candles and decreases on the second small candle. If the third candle's volume exceeds the first, it enhances the reliability of the directional change.