Three Inside Up

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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. 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. 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!