Three Outside Up

Three Outside Up

Three Outside Up is a three candlestick reversal formation. A bullish Three Outside Up formation occurs in a downtrend and begins with a candle in the direction of the trend. The second candle's real body engulfs the first days body. The third candle closes higher than the previous day.


The Bullish Three Outside Up pattern is one of the more clear-cut three day bullish reversal patterns. The formation reflects buyers overtaking selling strength, and often precedes a continued rally in price. In fact up to day-two we have a bullish Engulfing Pattern, itself a strong two-day reversal pattern.