A Bearish reversal in the offing ?
As there is no market today, I thought of exploring a bit more into the Candlestick Pattern occurrences.
· On 12 Apr 2010, a Bearish Harami pattern occurred.
· On 13 Apr, a “ Three Inside down pattern occurred.
What is This?
Definition:
The Bearish Three Inside Down Pattern is another name for the Confirmed Bearish Harami Pattern. The third day confirms the bearish trend reversal.
BEARISH THREE INSIDE DOWN
| Type: | Reversal |
| Relevance: | Bearish |
| Prior Trend: | Bullish |
| Reliability: | High |
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a Bearish Harami Pattern in the first two days.
3. We then see a black candlestick on the third day with a lower close than the second day.
Let us look at the occurrence of it in SENSEX
| Number | From | To | Breakout |
| | | | Direction |
| 0 | 9/26/1997 | 9/30/1997 | Dn |
| 1 | 10/23/2001 | 10/25/2001 | Dn |
| 2 | 5/24/2004 | 5/26/2004 | Dn |
| 3 | 10/4/2004 | 10/6/2004 | Dn |
| 4 | 9/20/2005 | 9/22/2005 | Up |
| 5 | 7/12/2006 | 7/14/2006 | Dn |
| 6 | 9/21/2006 | 9/25/2006 | Up |
| 7 | 10/3/2007 | 10/5/2007 | Up |
| 8 | 4/9/2010 | 4/13/2010 | |
You can see from the above spreadsheet that from 1997, there were 8 such occurrence and 5 were with a breakdown.
That is 62% of time, it was breakdown that followed.
We will see how this time this pattern performs…
