Upside Gap Two Crows candlestick pattern

The Upside Gap Two Crows is a bearish candlestick pattern that consists of three candles. Considered to be an unreliable pattern that might be a bullish continuation pattern. A rarely occurred pattern.

The 1st bullish candlestick signifies the existing dominance of the bulls in the market, while the 2nd bearish suggests a weakening of that bullish momentum. The bears will try to take control during the trading session and to decrease the prices, but there is a chance that they will not succeed.

The Upside Gap Two Crows is a variation of the Two Crows pattern. The distinctive feature of the Upside Gap Two Crows pattern is that the 2nd and 3rd candles close with a gap from the closing price of the 1st candle.

In the Two Crows pattern the closing price of the 3rd candlestick is lower than the closing price of the 2nd candlestick (within the body of the 1st green candlestick).

Construction

1st

• appears in established uptrend
• long green body

2nd

• short red body (not doji candle)
• opens with the gap up from close price of 1st candlestick
• closes above close price of 1st candlestick^①

3rd

• red body
• engulfs/ covers 2nd candlestick body^②
• opens with gap up above close price of 1st candlestick
• closes above close price of 1st candlestick^①

The additional bearish candlestick after the pattern can be served as the confirmation of the pattern forecast. Traders can also use the technical indicators aligning with the pattern for confirmation.

A significant increase in volume during the pattern formation can add strength to the reversal signal.