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Three Black Crows And Three White Soldiers Candlestick Pattern

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Three Black Crows candlestick pattern

In technical analysis, the Three Black Crows candlestick pattern is a reversal pattern. It forms at the peak of an uptrend. The pattern has three candles. All three of the candles are long and bearish. The candles are almost the same length. The open of each candle is below the open of the previous candle.

When the stock is at the peak of an uptrend and trading at resistance, the market participants anticipate a change in trend due to psychological or fundamental reasons. As a result, they tend to sell the stock. This selling activity forms the Three Black Crows pattern.

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Three White Soldiers candlestick pattern

The Three White Soldiers candlestick pattern is also a reversal pattern. It forms at the bottom of a downtrend. The pattern has three candles. All three of the candles are long and bullish. The candles are almost the same length. The open of each candle is above the open of the previous candle.

During the bottom of a downtrend, the market participants anticipate a change in trend due to psychological or fundamental reasons. They tend to buy the stocks. This buying activity forms the Three White Soldiers pattern. When three candles are seen in an uptrend, it suggests the stock trend will make higher highs.

These patterns are used for trend identification. The Three White Soldiers pattern can be used as an entry point. The Three Black Crows pattern can be used as an exit point. It’s advisable to use a combination of patterns and indicators to determine your trading strategy.

Key stocks with these patterns

Recently, we’ve seen the Three White Soldiers candlestick pattern in Eli Lilly & Co. (LLY), The Southern Company (SO), and Northeast Utilities (NU). In contrast, BB&T Corporation (BBT) and Leucadia National Corporation (LUK) are showing the Three Black Crows pattern.

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