Three black days occur with successive lower opens and lower closes. Then
a black day forms with some noticeably upper shadow. The final day is a
white day that gaps against the trend and opens above the body of the fourth
In a downtrend or during a pullback within an uptrend, the bears are certainly
in control. The buying that takes place on the forth day that forms the
long upper shadow hints at buyers starting to bottom fish and shorts possibly
taking some profits, but the intraday sell-off that closes the stock at
the lows likely wipes out the bulls, and with the lack of sellers available,
there isn’t much resistance left when the shorts start to cover.
The bullish Ladder Bottom is similar to the bullish Concealing Baby Swallow and bearish Three Black Crows.