Bullish Abandoned Baby

AAA

DEFINITION of 'Bullish Abandoned Baby'

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

1. The first bar is a large red candlestick located within a defined downtrend.
2. The second bar is a doji candle (open equal to the close) that gaps below the close of the first bar.
3. The last bar is a large white candle that opens above 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 downtrend is about to reverse.

bullish_abandoned_baby.gif

INVESTOPEDIA EXPLAINS 'Bullish Abandoned Baby'

The bullish abandoned baby is a rare, but reliable, candlestick pattern that is useful in determining changes to a dominant downtrend. 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. Candlestick

    A chart that displays the high, low, opening and closing prices ...
  2. Trend

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

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

    A name for candlesticks that provide information on their own ...
  5. Star

    1. A type of candlestick formation that is identified when a ...
  6. Evening Star

    A bearish candlestick pattern consisting of three candles that ...
Related Articles
  1. The Basic Language Of Candlestick Charting
    Charts & Patterns

    The Basic Language Of Candlestick Charting

  2. Candlestick Charting: What Is It?
    Charts & Patterns

    Candlestick Charting: What Is It?

  3. Candlestick Charting: Perfecting The ...
    Forex Education

    Candlestick Charting: Perfecting The ...

  4. Candlesticks Light The Way To Logical ...
    Charts & Patterns

    Candlesticks Light The Way To Logical ...

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center