Bearish Abandoned Baby Pattern

very rare top reversal signal

The Bearish Abandoned Baby Pattern is a very rare top reversal signal. It is basically composed of a Doji Star, which shows gaps (including shadows) from the prior and following sessions’ candlesticks.

1. Market is on an uptrend;
2. Day 1 shows a long white candlestick;
3. Day 2 has a doji whose shadows gap above Day 1’s upper shadow and also gaps in the previous uptrend’s direction; and
4. On Day 3, there is a black candlestick with a gap in the opposite direction and with no overlapping shadows.

Brief Explanation:
The BABP is a very rare top reversal signal. It is composed of a Doji Star which shows gaps and shadows from previous and next session’s candlesticks. Most of the three-day star patterns have similar scenarios. In an uptrend, it appears that the market is still strong. So we have a long white stick with a gap on Day 2. Trading on Day 2 is done within a small range and the closing price is very near to the opening price. The third day shows a reversal of positions. The black candlestick signifies that there is a sale-off potential.