Explaining bearish abandoned baby
This chart pattern equals to the bullish abandoned baby in all parameters, but has an opposite meaning. The bearish abandoned baby occurs at the end of increasing trends. Following a long white candlestick, the rate usually opens with a gap and a doji appears. On the third day the rate starts with a gap again. Due to the constant fall during the day a long black candlestick is formed. This pattern reconfirms the reversal. The abandoned baby pattern forms scarcely but it is a reliable sign.
The first gap has an important role in the abandoned baby Japanese candlestick pattern. The rapid rise in the listing reflects the panic on the market. In case of ascending trends it happens often that after a high scale recovery a reversal takes place. The reversal is reconfirmed by the seller’s strength on the day of the doji, as well as by the gap occuring on the following day.
Presence of bearish abandoned baby
As most of the group patterns of Japanese candlesticks, the bearish abandoned baby can be observed at stocks. It hardly appears on forex markets.
