| Abandoned Baby |
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Pattern: reversal
Reliability: high
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Identification
A long black day is followed by a Doji that gaps in the direction of the trend. Then a white day occurs gapping in the opposite direction with no overlapping shadows.
The Psychology
In a downtrend or within a pullback of an uptrend, the market gaps down but does not continue its downward movement. Instead enough bulls step up to bring supply and demand back into equilibrium and the stock churns in place. This isn't necessarily bullish, but it's certainly less bearish. The pattern is confirmed by the next day's gap up and rally.
The bullish Abandoned Baby formation doesn't occur too often and is similar to the bullish Doji Star, bullish Morning Star, and the bullish Morning Doji Star.
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