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 Separating Lines Candle Pattern

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

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

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The bullish separating lines candlestick pattern acts as a bullish continuation of the upward price trend already underway. The trend after the breakout, based on the overall performance rank, is quite strong. In fact, a look at the numbers shows that the bullish separating lines do best after a downward breakout in a bear market -- or even a bull market for that matter. Upward breakouts are the weaklings and downward breakouts are the muscles group.

Bullish Separating Lines Candlestick: Important Results

Theoretical performance: Bullish continuation Tested performance: Bullish continuation 72% of the time Frequency rank: 76 Overall performance rank: 36 Best percentage meeting price target: 63% (bull market, up breakout) Best average move in 10 days: -8.05% (bear market, down breakout) Best 10-day performance rank: 4 (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.

Bullish Separating Lines

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Bullish Separating Lines Candlestick: Discussion

As the Important Results numbers show, and I alluded to in the introduction, the bullish separating lines candle pattern acts in theory as it does in reality, that of a bullish continuation 72% of the time. That ranks 6th of out 103 candles, which is very strong. The frequency rank is 76, so this candle pattern will not be easy to spot because it is rare. Out of over 4.7 million candle lines, I found just 2,842 of them. That may sound like a lot, and it is, but I would rather have 20,000 to study like many of the other patterns I looked at.

The overall performance rank is 36, but within that number the story gets interesting. The best average move 10 days after the breakout is a drop of 8.05% in a bear market. That ranks 4th where 1 is best out of 103 candles. The height of the candle pattern meets its target 63% of the time. In other words, compute the height from top to bottom of the two-day candle and add it to the top of the candle and that will give you a target price. The stock reaches the target almost two-thirds of the time in a bull market.

Bullish Separating Lines Candlestick: Identification Guidelines

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Bullish Separating Lines Candlestick: 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. The breakout is upward most often -- page 656.
2. Select tall candles for the best performance (except for downward breakouts in bear markets)-- page 654-655.
3. Bullish separating lines within a third of the yearly high tend to act as continuations -- page 656-657.

Bullish Separating Lines Candlestick: Example

The bullish separating lines candlestick pattern appears circled in red on the daily scale. The upward price trend leading to the pattern is not a steep one as you might expect. The candle height throughout April is small so when the first black candle of the bullish separating lines candle comes along, it is a tall one (include the shadows). The next day, a tall white candle appears and the opening prices between the two candles are within a few pennies of each other. The candle pattern meets the criteria of a bullish separating lines pattern.

The breakout from this bullish separating lines candlestick is upward when price closes above the top of the candle pattern in June. The upward breakout says that this candle acted as a continuation of the upward price trend, just as theory suggested.

-- Thomas Bulkowski

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See Also

• 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.

I'm old and wise. You're young and stupid. Go figure.