This pattern is intented to singal either a trend reversal or the trend continuation. It consists of three white candlesticks of similar increments and size. It signifies a continuation of the trend
If the second and third day candlesticks open at or above the midrange of the previous day, this signifies that the trend will continue.
Three River Morning Doji Star
Reliability Rating: High
This pattern start with a long black candle (part of a downtrend), it is followed by a gap down doji and finally on the third day a white candle is formed with a gap up.
This pattern shows a potential rally. Many positions have changed for seller to buyer in this instance. It is the third white candle where the bullish signal can be confirmed. Be concious of the gaps since this will give you information as to the strength of the signal.
Three River Morning Star
Reliability Rating: High
The three river morning star is the opposite of the three river evening star, this is it's bullish equivalent.
Complex Bullish patterns
Bullish Sanpo (rising three methods)
Reliability Rating: high
The idea behind the sanpo pattern is that no price movement moves straight up or down, there always exists some retracement before the movement makes a new high or low. Therefore this pattern is to indicate whether a trader should "pause" during the trend (a short term consolidation will occur with a direction opposite to that of the major trend).
Bullish Formation (rising three methods)
Reliability Rating: Moderate
This is a multiple day pattern. It starts with an established downtrend. On the second day the stock gaps down with a smaller black candle. On day 3 and 4 the candles are small but closing downward. On the last day of the pattern a large white candle is formed.
In this pattern, day 4 in not necessary, an equally valid pattern is where days 1,2,3, and 5 occur.
This only shows the potential for a short term breakout and does not give indication about the strength of the breakout.
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