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.
BREAKING DOWN '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.