A run is a series of price movements that occur in the same direction for a particular security, sector, or index. A run is a prolonged uptrend or downtrend characterized by daily gains or losses. For example, if a stock’s price increased each day for five trading sessions, it would be said to be in a run and may also be referred to as a rally.
A run is a series of consecutive price increases or decreases in a given security. Often times, traders refer to a run as a bullish rally or a bearish rally. There is no set period of days that classifies a run, but most traders consider three or more consecutive price increases a run.
When looking at a run, traders should consider the underlying volume behind the move as an indicator of the strength of the run. Traders may also want to consider other factors surrounding the move, including other technical indicators and chart patterns.
The three white soldiers candlestick pattern is a type of run that consists of three consecutive long-bodied candlesticks that have closed higher than the previous day with each session’s open occurring within the body of the previous day’s candle. In general, the three white soldiers pattern is a bullish reversal when it occurs after a downtrend, but it may also act as a continuation pattern if it occurs during an uptrend or following a period of consolidation.
Several other candlestick patterns may also be helpful when analyzing runs. For example, a bullish engulfing may represent the beginning of the run, while doji stars may signal the end of a run. Traders should keep these candlestick patterns in mind when analyzing runs.
In the chart above, the SPDR S&P 500 ETF (SPY) experienced a run between mid-January and late-February of 2017. After a three white soldier pattern, the index continued to break out over the ensuing three weeks. This particular run consisted of six days of consecutive moves higher. The run eventually ended when the index began to consolidate before a further move higher in the ensuing weeks in a more mixed fashion.
A run is a series of consecutive price increases or decreases, which may also be referred to as a bullish or bearish rally. Traders should look at volume as an indicator of trend strength, while keeping an eye on technical indicators and chart patterns for additional confirmation.