As of 12/27/2024   Indus: 42,992 -333.59 -0.8%     Trans: 16,031 -73.46 -0.5%     Utils: 987 -4.51 -0.5%     Nasdaq: 19,722 -298.33 -1.5%     S&P 500: 5,971 -66.75 -1.1%	YTD  +14.1%    +0.8%    +12.0%    +31.4%    +25.2%	Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,700 or 15,500 by 01/15/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/27/24

As of 12/27/2024   Indus: 42,992 -333.59 -0.8%     Trans: 16,031 -73.46 -0.5%     Utils: 987 -4.51 -0.5%     Nasdaq: 19,722 -298.33 -1.5%     S&P 500: 5,971 -66.75 -1.1%	YTD  +14.1%    +0.8%    +12.0%    +31.4%    +25.2%
Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,700 or 15,500 by 01/15/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/27/24

Bulkowski on the Bullish Breakaway 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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The bullish breakaway is indeed bullish, unlike some other candlesticks with the bullish moniker. Unfortunately, it acts as a reversal just 59% of the time, which I consider "near random." The candle pattern is also rare. The overall performance is 45 out of 103 candlesticks where 1 is the best performing, so do not expect a long trend after this candle breaks out.

Bullish Breakaway: Important Results

Theoretical performance: Bullish reversal Tested performance: Bullish reversal 59% of the time Frequency rank: 97 Overall performance rank: 45 Best percentage meeting price target: 75% (bear market, down breakout) Best average move in 10 days: -5.79% (bear market, down breakout) Best 10-day performance rank: 12 (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.

Bullish Breakaway

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Bullish Breakaway: Discussion

The bullish breakaway candle is a rare pattern, rare enough that I did not provide performance statistics in my Encyclopedia of candlestick charts book. As with many multi-line candle patterns, the identification guidelines are stringent, eliminating many that might otherwise qualify. Of course, beauty is in the eye of the beholder (or beer holder), so it is ultimately up to you to decide what qualifies as a bullish breakaway.

The bullish breakaway candlestick acts as a bullish reversal both in theory and in the 41 I found. The overall performance rank is 45, which is mid list. The best average move 10 days after the breakout is a drop of 5.79% in a bear market. I consider moves of 6% or more as good, so I think this pattern performs well, too. However, additional samples might change that assessment. The best 10-day performance rank is 12, which is very good considering 1 is best out of 103 candle patterns.

Bullish Breakaway: Identification Guidelines

Bullish Breakaway: Example

The chart shows a bullish breakaway candlestick on the daily scale. I would like to say that it is a good example, but with a candle pattern as rare as this one, you take any that come along.

Circled in red is a tall black candle that begins the bullish breakaway. Price gaps lower the next day after another black candle appears. Note the gap between the two bodies. Days three and four are candles with lower closes, wrapped up with a white candle that closes within the gap between the bodies of the first two candles.

This candle pattern appears in a downward price trend and it acts as a bullish reversal when price closes above the top of the 5-candle pattern. A downward breakout would be a close below the lowest low in the pattern. Exciting isn't it?

-- Thomas Bulkowski

See Also

• The falling three methods candlestick shows a similar progression, hinting of a downward breakout.
• Perhaps a ladder bottom is a closer match.
• Tall candles show support and resistance.
• Two candlestick tips could improve profitability.
• Candles near the yearly low perform best.
• Chart pattern breakouts: Which candlesticks appear most often the day before breakouts?
• 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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