Two Black Gapping Candles

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Figure 1. Two Black Gapping Candles pattern.

Figure 1. Two Black Gapping Candles pattern.

Forecast: bearish continuation
Trend prior to the pattern: downtrend
Opposite pattern: none

Construction:

  • First candle
    • a candle in a downtrend
    • black body
    • opening price gaps lower from the previous candle
  • Second candle
    • black body
    • the opening below the prior candle's opening but higher than its low
    • the closing below the prior candle's closing

 

This article is devoted to the Two Black Gapping Candles two-line pattern.

The Two Black Gapping Candles is a bearish continuation pattern.

The first and the second line of the pattern can be any candle with a black body, except the doji candles. In other words, the following candles can appear within the pattern: Short Black Candle, Black Candle, Long Black Candle, Black Spinning Top, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. If a Black Spinning Top candle occurs within the pattern, none of its shadows lengths can exceed more than twice the body length (for that reason the High Have candle cannot appear within the pattern). Doji candles cannot occur within the pattern.

The opening price of the first pattern's candle needs to gap lower from the previous candle.

The Two Black Gapping Candles pattern appears in a downtrend and predicts its continuation. As with any other pattern, this one also should be confirmed on the following candles. Its second line can become the first line of some bullish reversal pattern, for example, a Bullish Harami or a Homing Pigeon. For that reason to consider pattern as confirmed, the following candle should be black with the closing price below the previous candle's closing. On markets where volume data is relevant, trading volume should increase on the candle following the pattern.

 

Figure 2.

Figure 2. A Two Black Gapping Candle predicts a downtrend continuation. The pattern is preceded by a Falling Window, which formed a strong resistance zone. On the chart it is clearly visible how this resistance zone worked for almost two weeks since the Two Black Gapping Candle occurred. Eventually, the bears make a strong move down.

 

Figure 3.

Figure 3. A Two Black Gapping Candle pattern forms a small price gap. The gap span is only $.0.07 and is hardly visible on the chart.
The pattern is confirmed by a Long Black Candle formed at a high trading volume.
The future showed how strong resistance zone was formed by the Two Black Gapping Candle.

 

Two Black Gapping Candles statistics

Below you can find some Two Black Gapping Candles 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: Two Black Gapping Candles
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 (Two Black Gapping Candles): 3,846
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Two Black Gapping Candles): 0.60 %
Average frequency: 581.5
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
23 960 930 636 1,297
% of
Occurrences
0.60 % 24.36 % 24.18 % 16.54 % 34.32 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
23 930 794 595 1,504
% of
Occurrences
0.60 % 23.58 % 20.64 % 15.47 % 39.71 %

 

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
ES 12 419.5 9 75.00 % 9 75.00 %
LEN 10 503.4 7 70.00 % 7 70.00 %
XEC 10 321.3 6 60.00 % 7 70.00 %
GGP 12 419.5 7 58.33 % 8 66.67 %
BA 15 335.6 8 60.00 % 9 66.66 %
C 20 251.7 12 60.00 % 13 65.00 %
EL 11 448.8 6 54.55 % 7 63.64 %
HAR 11 457.6 5 45.46 % 7 63.64 %
HES 11 457.6 7 63.64 % 7 63.64 %
LOW 11 457.6 6 54.55 % 7 63.64 %

 

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
MU 11 457.6 7 63.64 % 7 63.64 %
SWKS 11 457.6 7 63.64 % 7 63.64 %
AMT 10 429.5 6 60.00 % 6 60.00 %
JEC 11 457.6 6 54.55 % 6 54.55 %
FCX 13 386.9 6 46.15 % 6 46.15 %
ORCL 11 457.6 6 45.46 % 6 45.46 %
AKAM 11 358.3 5 45.45 % 5 45.45 %
CNX 11 369.9 5 45.45 % 5 45.45 %
CSCO 11 457.6 5 45.45 % 5 45.45 %
EMC 11 457.6 5 45.45 % 5 45.45 %
Pattern name: Two Black Gapping Candles
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 (Two Black Gapping Candles): 1,146
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Two Black Gapping Candles): 0.69 %
Average frequency: 535.8
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
23 230 396 227 270
% of
Occurrences
2.01 % 18.06 % 34.55 % 19.81 % 25.57 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
23 214 333 227 349
% of
Occurrences
2.01 % 16.66 % 29.06 % 19.81 % 32.46 %

 

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
MOS 3 419.3 1 33.34 % 3 100.00 %
WYNN 4 314.5 4 100.00 % 4 100.00 %
CVC 5 251.6 4 80.00 % 4 80.00 %
FCX 5 251.6 4 80.00 % 4 80.00 %
CHK 4 314.5 3 75.00 % 3 75.00 %
ESV 4 314.5 3 75.00 % 3 75.00 %
GLW 4 314.5 3 75.00 % 3 75.00 %
HAL 4 314.5 3 75.00 % 3 75.00 %
MCO 4 314.5 1 25.00 % 3 75.00 %
MET 4 314.5 3 75.00 % 3 75.00 %

 

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
ACN 4 314.5 3 75.00 % 3 75.00 %
LMT 4 314.5 3 75.00 % 3 75.00 %
AVGO 3 419.3 2 66.67 % 2 66.67 %
CSX 3 419.3 2 66.67 % 2 66.67 %
EOG 3 419.3 2 66.67 % 2 66.67 %
MU 3 419.3 2 66.67 % 2 66.67 %
PFG 3 419.3 2 66.67 % 2 66.67 %
SWKS 6 209.7 4 66.67 % 4 66.67 %
XLNX 3 419.3 2 66.67 % 2 66.67 %
BRCM 4 314.5 2 50.00 % 2 50.00 %

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