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Abandoned Baby
Advance Block
Belt Hold
Breakaway
Dark Cloud Cover
Deliberation
Doji Star
Dragonfly Doji
Downside Gap Three Methods
Downside Tasuki Gap
Engulfing
Evening Doji Star
Evening Star
Falling Three Methods
Gravestone Doji
Hanging Man
Harami
Harami Cross
Identical Three Crows
In Neck
Kicking
Meeting Lines
On Neck
Separating Lines
Shooting Star
Side By Side White Lines
Three Black Crows
Three Inside Down
Three Line Strike
Three Outside Down
Thrusting
Tri Star
Two Crows
Upside Gap Two Crows

Abandoned Baby
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Pattern: reversal
Reliability: high

Identification
A long white day is followed by a Doji that gaps in the direction of the trend. Then a black day occurs gapping in the opposite direction with no overlapping shadows.

The Psychology
In an uptrend or within a bounce of a downtrend, the market gaps up but does not continue it's upward movement. Instead enough bears step in to bring supply and demand back into equilibrium and the stock churns in place. This isn't necessarily bearish, but it's certainly less bullish. The pattern is confirmed by the next day's gap down and drop.

The bearish Abandoned Baby formation doesn't occur too often and is similar to the bearish Doji Star, bearish Evening Star, and bearish Evening Doji Star.



If you can handle the volatility, DAL provided a decent entry on a short when the stock formed a bearish Abandoned Baby formation at resistance. If this pattern had formed in a steady uptrend, it would be very risky, but given that it formed at a previous high, the reliability of the pattern increases.

 

 

 

 

 

 

 

 



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