Above The Stomach
Above the stomach is a simple candlestick pattern functioning as a bullish reversal 66% of the time.
Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 66% of the time.
The above stomach pattern is a two candlestick pattern which evolves over a period of two sessions. It requires a existing downtrend and usually appears at the bottom of a downtrend.
The first day of the pattern, bears are still in control as we have a confirmed downtrend. Second day, price opens higher above the mid of point of previous filled candle and also closes above the mid point .This clearly indicates that sentiments have changed completely and further buying will happen in coming sessions.
The above the stomach candle is an easy one to find. Look for two candles in a downward price trend. The first one is red and the second is green. The body of the second should be at or above the middle of the first candle's body. In other words, the opening and closing prices of the second day must be above the mid point of the first candle's body.
