As of 11/27/2020
Indus: 29,910 +37.90 +0.1%
Trans: 12,561 -59.99 -0.5%
Utils: 873 -7.80 -0.9%
Nasdaq: 12,206 +111.45 +0.9%
S&P 500: 3,638 +8.70 +0.2%
|
YTD
+4.8%
+15.2%
-0.7%
+36.0%
+12.6%
|
 30,700 or 28,250 by 12/15/202013,500 or 11,700 by 12/15/2020950 or 850 by 12/01/202012,500 or 11,200 by 12/01/20203,750 or 3,400 by 12/01/2020 |
As of 11/27/2020
Indus: 29,910 +37.90 +0.1%
Trans: 12,561 -59.99 -0.5%
Utils: 873 -7.80 -0.9%
Nasdaq: 12,206 +111.45 +0.9%
S&P 500: 3,638 +8.70 +0.2%
|
YTD
+4.8%
+15.2%
-0.7%
+36.0%
+12.6%
| |
|
30,700 or 28,250 by 12/15/202013,500 or 11,700 by 12/15/2020950 or 850 by 12/01/202012,500 or 11,200 by 12/01/20203,750 or 3,400 by 12/01/2020 | ||
The three inside up candlestick pattern is supposed to act as a bullish reversal and it does, quite often, too, -- not always, mind you, but quite often. The frequency rank is 31st out of 103 candle types, so this won't be as prevalent as hair on a gorilla, but you should be able to find the three inside up candlestick easily. Even better is the overall performance rank which is high. A check of the numbers shows that the three inside up candlestick works best after a downward breakout in a bear market.
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Encyclopedia of Candlestick Charts
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Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 65% of the time
Frequency rank: 31
Overall performance rank: 20
Best percentage meeting price target: 60% (bull market, up breakout)
Best average move in 10 days: -7.00% (bear market, down breakout)
Best 10-day performance rank: 9 (bear 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. |
 Three Inside Up
|
The three inside up candlestick is a bullish harami with a confirming candle as the third day, according to Morris who created this candle pattern. In theory, it acts as a bullish reversal. In reality, it acts the same way, but only 65% of the time. I still consider that a respectable reversal rate. When coupled with a overall performance rank of 20, this candle pattern deserves a closer look.
The best average move 10 days after the breakout is a drop of 7% in a bear market, ranking 9th. Anything over 6% I consider a good move, so this candlestick pattern does very well.
| Characteristic | Discussion |
| Number of candle lines | Three. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for a tall black candle in a downward price trend. The next day, a small bodied white candle has a body that is within the body of the prior candle. The tops or bottoms of the bodies can be the same price, but not both. The last day is a white candle that closes above the prior close. |
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.
The chart shows a three inside up candle pattern circled in red. Price trends downward into the start of the pattern, a tall black candle. Following that, a white candle appears that fits inside the body of the prior candle. This completes the bullish harami candlestick. The final day of the pattern is the confirming candle, a white one that closes above the prior close, which it does. The combination suggests price has reversed trend.
An upward breakout occurs when price closes above the top of the candlestick. That happens in this example of the three inside up candlestick. Price enters the pattern trending downward and exits upward, so this three inside up acts as a reversal. However, look at how far price climbs. It forms a triple top before reversing and making a strong move down into March.
For the best performing setup, look for an upward price trend (the longer term trend). Then find a downward retrace of that uptrend followed by the three inside up candle. When price breaks out upward from that candle pattern it rejoins the uptrend already underway. Price often continues moving up after that.
-- Thomas Bulkowski
See Also
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