Upside Gap Two Crows

Upside Gap 2 crows is a bearish Japanese candlestick reversal pattern explained in the book of Steve Nisson. There is a strong bullish candlestick pattern in the uptrend followed by a gap-up opening. The trend is up and price pattern is bullish.

The bulls could not continue to the momentum in the current session and price closed lower. It turns out to be a bearish candlestick pattern. Body of this pattern is relatively smaller but it is higher than the body of the previous bullish candlestick pattern. Hence, it is a bearish star pattern with second candle having bearish body.

In the next session, price gaps up above the previous session. So now, the bulls are back in action after a pause in the second candle. There is an opportunity for bulls to trade a bullish continuation pattern.

But the price closes lower in that session as well and it turns out to be a bearish candlestick pattern. The bearish body of this third candle engulfs the body of the middle bearish candlestick pattern. This formation is known as Upside Gap Two Crows pattern.

It shows that the bulls failed to take the prices further even after attempting it. The continuation pattern bulls are stuck in the trade. There is a possibility of a trend reversal.

If price goes and close above this high of the third candle, then it will be a failure of this bearish pattern and it will trigger a bullish continuation Candlestick pattern known as a Mat-hold pattern.

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This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.