Concealing Baby Swallow

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Figure 1.

Figure 1. Concealing Baby Swallow pattern.

Japanese name: kotsubame tsutsumi
Forecast: bullish reversal
Trend prior to the pattern: downtrend
Opposite pattern: none
Number of candle lines: 4

Construction:

  • First candle
  • Second candle
    • a Black Marubozu candle
    • candle opens within the prior candle's body
    • candle closes below the prior closing price
  • Third candle
    • a High Wave basic candle with no lower shadow
    • candle opens below the prior closing price
    • upper shadow enters the prior candle's body
  • Fourth candle
    • black body
    • candle’s body engulfs the prior candle’s body including the shadows

 

The Concealing Baby Swallow is a four-line candlestick pattern, which appears so rarely (or not at all) that can be ignored by the traders.

Two Black Marubozu candles appearing one after the other are very uncommon situation on the candlestick charts what limits the appearance of this pattern. The additional requirement, that is appearance of the High Wave candle causes that the pattern almost do not appear on the charts.

There is a gap between the first and the second line. The second and the third line may form the Inverted Hammer pattern, which is of the same forecast as the Concealing Baby Swallow, that is bullish reversal.

 

Figure 2.

Figure 2. The Concealing Baby Swallow is classified as a bullish reversal candlestick pattern. It may be hard to think about this pattern as a bullish one because to confirm it, the bulls need to move price above the first line of the Concealing Baby Swallow.
On the chart, we see that the bulls cannot break a resistance zone formed by the third Bearish Strong Line pattern, being part of a Concealing Baby Swallow.
Note that an Inverted Hammer may seem to have a too short upper shadow. However, the shadow length is 80% of the whole candle height. It is clear to see this when using specialized software like CandleScanner.

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