
Abandoned Baby |
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Pattern: reversal
Reliability: high
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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.
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