Three line strikes

Three line strikes

• Direction: Bearish
• Type: Continuation
• Reliability: Weak


• After an established downtrend three long red days in a row continue this move, each closing lower than the previous day
• Day-four is blue candle that closes near the open of the first day


So long as the previous downtrend is an established one, candlestick analysts view this formation as a sign that the downtrend may still continue.

The first three days serve as a fairly clear bearish move. Up to day-three in fact we have a Three Black Crows formation which is a strong bearish signal. One day of rally that only goes up to the open price of the patterns start is considered to be more sellers covering their positions than any true sign of a reversal. Thus traders will watch for short entry opportunities to come.