Technical Analysis -- Episode 14: Three outside down
Source: Tiger Trade app
The three outside down is a technical pattern commonly seen on price charts, indicating a potential downtrend in the market.
The three outside down pattern consists of three consecutive candlesticks, where the second bearish candle completely engulfs or "swallows" the body of the first bullish candle, and the third larger bearish candle breaks below the lows of the previous two candles.
The specific characteristics of this technical pattern are as follows:
First candlestick: The first candlestick is a bullish candle (the body is between the open and close prices) and indicates an uptrend.
Second candlestick: The second candlestick is a bearish candle (the body is between the open and close prices) that completely engulfs or "swallows" the body of the first bullish candle, suggesting that bullish momentum is being suppressed by bearish forces.
Third candlestick: The third candlestick is a larger bearish candle that breaks below the lows of the previous two candles, indicating that the bullish forces have been completely defeated and prices may continue to decline.
The three outside down pattern signals a shift in market sentiment, with weakening bullish forces and strengthening bearish forces, implying a potential downtrend. However, for increased accuracy in trading decisions, it is essential to combine this pattern with other technical indicators and trend confirmations, as well as implement appropriate risk management strategies.
Here's an example:
Apple Inc. (AAPL) - A clear three outside down pattern appeared in September 2020. After confirmation of the three outside down patterns, the stock price of Apple started to weaken in the following period.
Source：Tiger trade app
Regarding the three outside down technical patterns, you should also pay attention to the following aspects:
Confirm the pattern: Ensure that the second bearish candle completely engulfs or "swallows" the body of the first bullish candle and that the third larger bearish candle breaks below the lows of the previous two candles.
Downtrend: The three outside down patterns typically occur after an uptrend, indicating a potential signal for price reversal.
Trading volume: Observe the trading volume when the three outside down patterns appear; higher trading volume can provide stronger confirmation signals.
Trend confirmation: Combine other technical indicators and trend confirmation tools, such as moving averages, Relative Strength Index (RSI), etc., to confirm the validity of the three outside down pattern.
Breakout confirmation: Observe whether the price can break below the lows of the three outside down patterns; this may be a signal for further downward movement.
Target price: Based on the height of the three outside down patterns and the location of the breakout point, you can estimate the target level for future prices.
Please note that technical patterns are just one tool for analyzing stock trends and should not be used as the sole basis for investment decisions. A comprehensive assessment, considering technical, fundamental, and market factors, is necessary for more accurate investment judgments!
【Reply to Win Rewards】
Tigers who select the right chart pattern of the three outside down from the following three figures will receive 5 Tiger Coins. (Please comment on the stock or the photo directly)
Figure 1
Figure 2
Figure 3
Tigers who share stocks of chart out of the following options will be rewarded with 10 Tiger Coins.
【Event Duration】
17 October 2023 — 24 October 2023
In the next issue, we'll introduce another useful technical pattern, Three outside up, which will make your stock trading easier and simpler after you learn it!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
🌟🌟🌟I found the 3 outside down pattern in $Tesla Motors(TSLA)$
Where the 1st candle is a Bullish candle, followed by the 2nd Bearish candle which completely engulfs the 1st candle and the 3rd candle is below the lines of the 2 candles preceding it. This indicates a Bearish downward trend for Tesla.
Of course this should not be the only indicator to confirm the Bearish trend. I should also use Moving Average and other technical indicators as well.
Thanks @Tiger_Academy for this valuable lesson on reading technical patterns.
Guys, come and join together @GoodLife99 @Aqa @b1uesky @icycrystal @Universe宇宙 @koolgal @rL
@b1uesky @Universe宇宙 @Jadenkho @GoodLife99 @Fenger1188
外面的三个向下是价格图表上常见的技术形态，表明市场潜在的下跌趋势。
三外向下形态由三根连续的烛台组成，其中第二根看跌蜡烛完全吞没或“吞下”第一根看涨蜡烛的主体，第三根较大的看跌蜡烛跌破前两根蜡烛的低点。
第一根燭臺：第一根燭臺是看漲蠟燭（主體在開盤價和收盤價之間），表示上升趨勢。
第二根燭臺：第二根燭臺是一根熊市蠟燭線（主體在開盤價和收盤價之間），它完全吞沒或“吞下”第一根看漲蠟燭線的主體，表明看漲勢頭被看跌力量壓制。
第三根燭臺：第三根燭臺是一根較大的看跌蠟燭線，跌破前兩根蠟燭線的低點，表明看漲力量已被徹底擊敗，價格可能繼續下跌。
[The blue box in Figure 3 draws attention to the pattern; gives away answer]
DBS (D05)
"Three Outside Down" pattern appeared in February 2023
I think I found one in recent $Incredible(RDR.SI)$ stats