Upside Tasuki Gap
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 bullish continuation pattern appearing during an uptrend. A bullish candle appears with a gap up, followed by a bearish candle that pulls back into the gap but fails to fill it. The unfilled gap indicates that buyers remain in control, suggesting a buying opportunity on the pullback and continued upside.
Enter long after confirming the third bearish candle is complete and the gap remains unfilled. Buying on the pullback near the third candle's low is ideal.
Project the gap size upward from the third candle's high. Or target the most recent high.
Place a stop-loss slightly below the gap's lower limit (first candle's high). If the gap is filled, the pattern is negated; exit.
If the second gap-up bullish candle has increased volume while the third bearish candle has decreased volume, selling pressure is limited and uptrend continuation reliability is high.