Bearish Abandoned Baby

AAA

DEFINITION of 'Bearish Abandoned Baby'

A type of candlestick pattern that is used by traders to signal a reversal in the current uptrend. This pattern is formed by three distinct candlesticks that show the following characteristics:

1. The first bar is a large white candlestick located within a defined uptrend.

2. The second bar is a doji candle (open equal to the close) that gaps above the close of the first bar.

3. The last bar is a large red candle that opens below the second bar and is used to show the change in trader sentiment.

As you can see from the chart below, the pattern is a charting signal that the uptrend is about to reverse.

bearish_abandoned_baby.gif



INVESTOPEDIA EXPLAINS 'Bearish Abandoned Baby'

The bearish abandoned baby is a rare but reliable candlestick pattern that is useful in determining changes to a dominant uptrend. The accuracy of the reversal signal is greatly improved when it is used in conjunction with other technical indicators, such as the MACD and RSI, to confirm the reversal.

RELATED TERMS
  1. Bear Position

    Alternate term for a short position in a financial security. ...
  2. Candlestick

    A chart that displays the high, low, opening and closing prices ...
  3. Moving Average Convergence Divergence ...

    A trend-following momentum indicator that shows the relationship ...
  4. Trend

    The general direction of a market or of the price of an asset. ...
  5. Reversal

    A change in the direction of a price trend. On a price chart, ...
  6. Doji

    A name for candlesticks that provide information on their own ...
Related Articles
  1. Charts & Patterns

    The Basic Language Of Candlestick Charting

    If you want to use candlestick charting to get a sense of where a stock is headed, you need to learn how to read this unique charting language.
  2. Charts & Patterns

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  3. Forex Education

    Candlestick Charting: Perfecting The Art

    Take a look at continuation patterns and how they can confirm or deny trends.
  4. Charts & Patterns

    Candlesticks Light The Way To Logical Trading

    Crowd psychology is the reason this technique works. Find out how to make it work for you.
  5. Charts & Patterns

    Advanced Candlestick Patterns

    Go beyond the basics! Learn to identify and trade island reversals, kicker patterns and more.
  6. Chart Advisor

    ChartAdvisor for December 19 2014

    A weekly technical summary of the major U.S. indexes.
  7. Trading Strategies

    What does a double bottom tell a trader about the overall trend?

    Learn how a double bottom pattern forms on a price chart and why many traders consider double bottoms to be a sign of reversal in the price trend.
  8. Trading Strategies

    What are the main differences between a double top and a double bottom?

    Identify double tops and double bottoms, and learn what each could mean for the security's current price trend. Discover how other indicators verify movements.
  9. Technical Indicators

    What are common trading strategies used when identifying a double bottom

    Use simple, low-risk trading strategies to take advantage of a double bottom formation. Traders typically take one of these approaches to buying the market.
  10. Forex Strategies

    What are the most common divergence strategies implemented in forex trading?

    Discover common divergence strategies that utilize either stochastics or the MACD, the two most frequently used momentum indicators in forex trading.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center