As of 10/07/2024   Indus: 41,954 -398.51 -0.9%     Trans: 15,783 -31.37 -0.2%     Utils: 1,027 -24.05 -2.3%     Nasdaq: 17,924 -213.95 -1.2%     S&P 500: 5,696 -55.13 -1.0%	YTD  +11.3%   -0.7%    +16.5%    +19.4%    +19.4%	Targets    Overview: 09/30/2024     43,500 or 41,600 by 10/15/2024   16,800 or 15,700 by 10/15/2024   1,125 or 1,025 by 10/15/2024   19,000 or 17,600 by 10/15/2024   5,900 or 5,600 by 10/15/2024
Chart Pattern Indicator: on 10/7/24

As of 10/07/2024   Indus: 41,954 -398.51 -0.9%     Trans: 15,783 -31.37 -0.2%     Utils: 1,027 -24.05 -2.3%     Nasdaq: 17,924 -213.95 -1.2%     S&P 500: 5,696 -55.13 -1.0%	YTD  +11.3%   -0.7%    +16.5%    +19.4%    +19.4%
Targets    Overview: 09/30/2024     43,500 or 41,600 by 10/15/2024   16,800 or 15,700 by 10/15/2024   1,125 or 1,025 by 10/15/2024   19,000 or 17,600 by 10/15/2024   5,900 or 5,600 by 10/15/2024
Chart Pattern Indicator: on 10/7/24

Bulkowski on the Below The Stomach Candlestick

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

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Below the stomach candlestick is the inverted variety of the above the stomach pattern, only below the stomach does not perform as well. Below the stomach acts as a bearish reversal of the up trend just 60% of the time. The overall performance ranks 59th, or about mid list where a performance rank of 1 is best out of 103 candlestick types. My guess is this candle pattern works best as an upward retrace in a downward price trend. That way, price rejoins the downward movement of the primary trend after the breakout.

Below the Stomach: Important Results

Theoretical performance: Bearish reversal Tested performance: Bearish reversal 60% of the time Frequency rank: 38 Overall performance rank: 59 Best percentage meeting price target: 60% (bull market, up breakout) Best average move in 10 days: 4.81% (bear market, up breakout) Best 10-day performance rank: 32 (bear market, up 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.

Below The Stomach

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Below the Stomach: Discussion

Below the stomach candle pattern is a disappointing candlestick when compared to its sister, the above the stomach pattern. Below the stomach functions as a bearish reversal 60% of the time. The overall performance rank is 59, well down the list from the candle with the best performance rank, 1. However, the pattern does appear frequently, ranking 38.

The best average move 10 days after a breakout is a rise of 4.81% in a bear market, scoring a rank of 32 in the process. The rise also falls short of the 6% or higher moves that I like to see. Once price breaks out, it trends but not for too long.

Below the Stomach: Identification Guidelines

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Below the Stomach: Three Trading Tidbits

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.

1. Below the stomach candles that appear within a third of the yearly low perform best -- page 111.
2. Channels can help predict turning points -- page 112-114.
3. Volume gives performance clues -- page 112.

Below the Stomach: Example

The chart of 3M appears on the daily scale. Circled in red is the below the stomach candlestick pattern.

The uptrend leading to the start of the pattern lasts for just a few days before the tall white candle shows. Following that, a black candle with its opening and closing prices appears, showing a body below the mid point of the white candle from the day before. Price trends horizontally for a week after the below the stomach candle before making a straight-line run down.

The setup shown here, an upward retrace in a downward price trend, is the preferred one. When price breaks out downward (which means a close below the lowest low in the candle pattern), price rejoins the downward primary trend already in progress.

-- Thomas Bulkowski

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See Also

• In neck candles are similar to below the stomach. Have you found the right one?
• If the in bound trend is downward, it could be a bearish separating lines.
• Tall candles show support and resistance.
• Two candlestick tips could improve profitability.
• Candles near the yearly low perform best.
• Shadows. Do tall candle shadows predict price turns? Yes and no.
• Tall candles at peaks and valleys. Tall candles appear at turning points.

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