Leavitt Brothers: Education - Candle Stick Patterns

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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

Deliberation

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Pattern: reversal
Reliability: moderate

Identification
A long white day is followed by a second long white day that closes higher than the first. The third white day gaps above the second and becomes a white spinning top or Doji.

The Psychology
The first two white days say “full speed ahead” as the stock appears strong and in a solid uptrend. But the gap up and failure to rally much suggests that the strength may be waning. This isn't necessarily bearish, but it's certainly less bullish, so stops are raised, or profits taken on long positions.

The bearish Deliberation is similar to the bullish Three White Soldiers and bearish Advance Block and could be the beginning of the bearish Evening Star.

Deliberation formations are not for the light of heart because you are essentially shorting a strong stock. Here you can see AT&T rally strongly on high volume. The third white day (which was small) hinted that the buyers may be getting tired. A good trader would wait until the next day to short the gap down at the open…or the pattern could simply be used as an exit strategy for an existing long position.

Again, it's hard to short a stock as strong as VXGN was in this bearish Deliberation pattern, but its formation could offer an exit strategy if you are long.

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