Japanese candlesticks - Tasuki gap
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Bullish tasuki gap
Definition: A bullish tasuki gap structure is comprised of three Japanese candlesticks. The first and second must be separated by a bullish gap. Subsequently, a partial filling of the gap on a bearish candlestick (red) occurs. The closing price of this last candlestick must be lower than that of the second. The last two candlesticks are small.
Illustration:
Characteristic: A bullish tasuki gap structure follows a bullish trend marked by several large green candlesticks.
Significance: A bullish tasuki gap is a continuation pattern and reflects a failed attempt to fill the gap and for sellers to regain control. This means that the gap area is well received by buyers and validated as a support.
Note: A bullish tasuki gap is a very rare pattern. The last two candlesticks must be approximately the same size. In some cases, the bullish gap can be fully filled on the third candlestick without questioning the pattern.
Invalidation: If the next candlestick is not bullish or does not open onto a bullish gap, the structure can be considered invalidated.
Bearish tasuki gap
Definition: A bearish tasuki gap is a structure made up of three Japanese candlesticks. The first and second must be separated by a bearish gap. Thereafter a partial filling of the gap on a bullish candlestick (green) occurs. The closing price of this last candlestick must be higher than that of the second. The last two candlesticks are small.
Illustration:
Characteristic: A bearish tasuki gap structure follows a bearish trend marked by several large red candlesticks.
Significance: A bearish tasuki gap is a continuation pattern and reflects a failed attempt to fill the gap and for buyers to regain control. This means that the gap area is well received by sellers and validated as a support.
Note: A downward tasuki gap is a very rare pattern. The last two candlesticks must be approximately the same size. In some cases, the downward gap can be fully filled on the third candlestick without questioning the pattern.
Invalidation: If the next candlestick is not bearish or does not open onto a bearish gap, the structure can be considered invalidated.
