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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Concealing Baby Swallow

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 09/18/2017
22,331 63.01 0.3%
9,515 -31.61 -0.3%
739 -7.54 -1.0%
6,455 6.17 0.1%
2,504 3.64 0.1%
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19.9%
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Tom's Targets    Overview: 09/14/2017
22,450 or 21,500 by 10/01/2017
9,750 or 9,200 by 10/01/2017
775 or 730 by 10/01/2017
6,650 or 6,200 by 10/01/2017
2,600 or 2,425 by 10/01/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The concealing baby swallow candlestick is so rare that I found only 4 of them out of over 4.7 million candle lines. That was not enough samples to justify including statistics in my Encyclopedia of Candlestick Charts book. Thus, this candlestick is probably one you can ignore because you will see only a handful in your lifetime.

Concealing Baby Swallow Important Results

Theoretical performance: Bullish reversal
Tested performance: Bearish continuation 75% of the time
Frequency rank: 103
Overall performance rank: 101
Best percentage meeting price target: 67% (bull market, down breakout)
Best average move in 10 days: -7.10% (bull market, down breakout)
Best 10-day performance rank: 3 (bull market, down breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal concealing baby swallow candlestick
Concealing Baby Swallow
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Concealing Baby Swallow Discussion

As I mentioned, I found just four concealing baby swallow candlestick patterns when I researched my Encyclopedia of Candlestick Charts book, so there is not much to tell. The pattern is supposed to be a bullish reversal, but I found it acts as a bearish continuation 75% of the time. The frequency rank is dead last, at 103, and the overall performance rank is almost as bad: 101 where 1 is best. The reason for the poor performance is because the measure uses four categories and I only found concealing baby swallow candles in two of them, so zeros were added in. That hurt performance.

The move 10 days after a breakout shows price dropping 7.10% in a bull market. I consider anything above 6% to be good, so this is excellent. The performance ranks 3rd, which is almost the best seen (a rank of 1).

Concealing Baby Swallow Identification Guidelines

CharacteristicDiscussion
Number of candle linesFour.
Price trend leading to the patternDownward.
ConfigurationLook for four black candles. The first two are long black marubozu candles followed the next day by a candle with a tall upper shadow. The candle gaps open downward but price trades into the body of the prior day. The last candle engulfs the prior day, including the shadows (a higher high and lower low than the prior day).

 

The concealing baby swallow candlestick on the daily scale

Concealing Baby Swallow Example

The chart shows a concealing baby swallow candlestick, circled in red, on the daily scale. All four candles are black with the first two being tall black marubozu candles. The next day, price gaps open lower, but climbs into the body of the prior day before closing down for the day. The next day has a high price that meets or exceeds the prior day's high and a lower low. The price trend leading to the concealing baby swallow is downward and so is the breakout. This candle acts as a continuation of the downward price trend.

-- Thomas Bulkowski

 

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. I'm not tense, just terribly, terribly alert.