Japanese candlesticks - gapping play
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Bullish gapping play
Definition: A bullish gapping play structure is comprised of three Japanese candlesticks. The first two are bullish (green) and small, which indicates hesitation. The opening of the third candlestick occurs on a bullish gap. This one must be large.
Illustration:
Characteristic: A bullish gapping play follows a period of hesitation (small candlesticks) after a period of significant increase characterized by several large green Japanese candlesticks. Small candlesticks before the gap must remain in the upper area of the last large candlestick.
Significance: A bullish gapping play is a continuation pattern, it is a strong signal that the bullish movement will continue.
Note: A bullish gapping play proves to be stronger if the candlestick before the gap is red.
Invalidation: If the next candlestick is not bullish or does not open on a bullish gap, the bullish gapping play structure is invalidated.
Bearish gapping play
Definition: A bearish gapping play structure is comprised of three Japanese candlesticks. The first two are bearish (red) and small, which indicates hesitation. The opening of the third candlestick occurs on a bearish gap. This one must be large.
Illustration:
Characteristic: A bearish gapping play follows a period of hesitation (small candlesticks) after a period of significant decline characterized by several large red Japanese candlesticks. Small candlesticks before the gap must remain in the lower zone of the last large candlestick of the descent.
Significance: A bearish gapping play is a continuation pattern, it is a strong signal that the bearish movement will continue.
Note: A bearish gapping play proves to be stronger if the candlestick before the gap is green.
Invalidation: If the next candlestick is not bearish or does not open on a bearish gap, the bearish gapping play structure is invalidated.
