Stalled Pattern

DEFINITION of 'Stalled Pattern'

The stalled pattern, also known as the deliberation pattern, is a candlestick chart pattern that occurs during an uptrend and signals a bearish reversal. The pattern consists of three white candles that meet a specific set of criteria.

BREAKING DOWN 'Stalled Pattern'

The stalled pattern consists of three white candles, where:

  • The third candle has a shorter real body than the first or second candles.
  • Each candle’s open and close is higher than the previous candle.
  • The third candle has a short real body or doji, a tall upper shadow, and an open that’s near the close of the second candle.

The chart pattern alone indicates indecision in the market, which is why it’s also known as a deliberation pattern. While a bearish reversal isn’t imminent, the indecision could suggest limited upside for traders looking to turn a quick profit.

The chart pattern could signal a bearish reversal when the candle following the stalled pattern moves below the midpoint of the second candle’s real body. When this occurs, traders may want to consider taking a profit or cutting the losses on their position.

Traders may also look for confirmations of a reversal in future candles following the stalled pattern, such as a bearish engulfing. The pattern may also appear within a larger chart pattern that spans several days or weeks – such as a head and shoulders.