Three Inside Up

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Figure 1.

Figure 1. Three Inside Up pattern.

Forecast: bullish reversal
Trend prior to the pattern: downtrend
Opposite pattern: Three Inside Down
See also: Bullish Harami

Construction:

  • First candle
    • a candle in a downtrend
    • black body
  • Second candle
    • white body
    • the candle body is engulfed by the prior candle body
  • Third candle
    • the closing price is above the previous closing price

 
The Three Inside Up pattern was introduced by Gregory Morris as an extension of the Bullish Harami, confirming that pattern.

Its first line is any candle having a black body, appearing as a long line, that is a Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu or Closing Black Marubozu. The second line is any white candle except the doji candles. Additionally the second line body needs to be engulfed by the first line body. In other words, the first and the second line of the pattern forms the Bullish Harami pattern.

The opening price of the second line may be equal to the first candle’s closing price. The closing price of the second line may be equal to the opening price of the first candle. These two situations cannot happen at the same time, however.

The third candle of the pattern may be formed by any candle having a white body, except the doji candles, closing above the second candle’s closing price. This candle is meant to act as a confirmation of the Bullish Harami pattern.

The shadows do not matter in the case of this pattern.

The first line of the pattern may serve as a support area.

The Three Inside Up pattern should be confirmed, although it is an extension of the confirmed Bullish Harami pattern. Confirmation can be in the form of breaking the nearest support zone or a trendline.

 

Figure 2.

Figure 2. An interesting example, presenting a close relationship between three patterns. The Three Inside Up always contains the Bullish Harami pattern formed by two first lines. Here, additionally, we can notice a Takuri Line pattern, which is the second line of a Bullish Harami pattern.
It is worth to mention also that the first line of every Bullish Harami pattern may act as a resistance zone.
The Bullish Harami shown on the chart is strong because its second line closes only slightly below the opening price of the first line. Such configuration helps the bulls to close the first candle and move higher.
A Three Inside Up on the chart is "strong" because: (1) there is a price gap between the second and the third line (i.e. between a High Wave and a White Candle); (2) White Candle breaks the trendline (confirmation); (3) the White Candle is formed at a very high trading volume indicating that the bulls are in control of the market.

 

Figure 3.

Figure 3. Without looking on the right side of the chart, after a Three Inside Up occurrence, the pattern would be seen rather as a weak one.
The first line of the Three Inside Up is a Black Candle, which is preceded by a Long Black Candle formed at a very high trading volume. This is a very bearish picture.
Despite such a difficult situation for the bulls, they were able to move the market slowly up.

 

Three Inside Up statistics

Below you can find some Three Inside Up pattern statistics calculated by CandleScanner software. To see more detailed statistics, for other markets and periodicity try our CandleScanner software. Prices start at only $10, and you can see more detailed statistics, for other markets and periodicity. Click here to find out more!

Pattern name: Three Inside Up
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Three Inside Up): 14,197
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Three Inside Up): 2.22 %
Average frequency: 157.5
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
1 2,588 3,993 2,680 4,935
% of
Occurrences
0.01 % 18.22 % 28.13 % 18.88 % 34.76 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
9 2,452 3,171 2,278 6,287
% of
Occurrences
0.06 % 17.21 % 22.34 % 16.05 % 44.34 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
HUM 31 162.4 19 61.30 % 23 74.19 %
WAT 33 149.6 16 48.49 % 22 66.67 %
NBL 35 143.8 21 60.00 % 23 65.72 %
ROP 35 143.8 15 42.86 % 23 65.72 %
BWA 36 139.8 21 58.33 % 23 63.88 %
NUE 44 114.4 23 52.27 % 28 63.63 %
FAST 30 167.8 17 56.67 % 19 63.34 %
COF 46 109.4 25 54.35 % 29 63.05 %
ADBE 35 143.8 18 51.43 % 22 62.86 %
DO 40 124.1 24 60.00 % 25 62.50 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
LVLT 34 127.6 15 44.12 % 15 44.12 %
YHOO 33 146.6 13 39.39 % 13 39.39 %
PKI 36 139.8 14 38.89 % 14 38.89 %
ALTR 30 167.8 11 36.67 % 11 36.67 %
NOV 44 106.8 16 36.36 % 16 36.36 %
SWN 31 162.4 11 35.48 % 11 35.48 %
XLNX 31 162.4 11 35.48 % 11 35.48 %
JNPR 32 125.9 11 34.38 % 11 34.38 %
AAPL 30 167.8 10 33.33 % 10 33.33 %
MYL 34 148.1 12 35.29 % 11 32.35 %
Pattern name: Three Inside Up
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Three Inside Up): 3,333
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Three Inside Up): 2.00 %
Average frequency: 184.2
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
1 436 1,217 731 948
% of
Occurrences
0.03 % 13.05 % 36.51 % 21.93 % 28.48 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
9 393 893 637 1,401
% of
Occurrences
0.27 % 11.52 % 26.79 % 19.11 % 42.31 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
HBI 7 179.7 5 71.43 % 7 100.00 %
MHFI 9 139.8 6 66.67 % 7 77.78 %
PCAR 9 139.8 5 55.56 % 7 77.78 %
BBY 8 157.3 4 50.00 % 6 75.00 %
CRM 8 157.3 6 75.00 % 6 75.00 %
HOG 8 157.3 5 62.50 % 6 75.00 %
HRB 8 157.3 3 37.50 % 6 75.00 %
R 8 157.3 4 50.00 % 6 75.00 %
BLK 11 114.4 6 54.55 % 8 72.73 %
AMG 7 179.7 2 28.56 % 5 71.42 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
SWN 9 139.8 5 55.56 % 5 55.56 %
LVLT 12 104.8 5 41.67 % 5 41.67 %
MU 12 104.8 5 41.67 % 5 41.67 %
NFX 8 157.3 3 37.50 % 3 37.50 %
BK 11 114.4 4 36.36 % 4 36.36 %
CNX 11 114.4 4 36.36 % 4 27.27 %
VRTX 11 114.2 4 36.36 % 4 36.36 %
EQR 12 104.8 4 33.33 % 4 33.33 %
HAS 9 139.8 4 44.44 % 3 33.33 %
K 9 139.8 3 33.33 % 3 33.33 %

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