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Bullish Abandoned Baby

Candlefocus Editor
The bullish abandoned baby is a three-bar reversal pattern illustrated by a single long bearish candle followed by a doji with a gap downwards from the previous candle and then a third long bullish candle with a gap upward from the doji. The pattern usually follows a downward trend and implies a possible reversal to the upside. This pattern is often seen at important lows or support levels in a given market.

The long bearish candle indicates that the bears are in control and are driving prices lower. But the doji represents a lack of direction and shows indecision among the bears resulting in an indecisive doji. The gap downward between the bearish candle and the doji signifies the bear's desire to drive prices lower, but their failure to do so. Finally, the bullish candle with the gap upwards from the doji shows that the bears gave up, and the bulls took over, driving prices higher. This can indicate potential buying opportunities for traders.

The key to validating the bullish abandoned baby is the gap between the doji and the next bullish candle. The gap must be present, and it must go upwards. It is also important to take into account the context, as the bullish abandoned baby usually appears only after a long bearish trend.

The bullish abandoned baby may not be predictive 100% of the time, and any trading decision based off of this pattern should always be supported by additional analysis. But the pattern does offer a potential entry point to traders who are looking for the start of a possible new uptrend. The presumption is that the bears are exhausted and the bulls have taken control. Nonetheless, the bullish abandoned baby pattern is an effective tool for traders to have in their arsenal.

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