Upside Gap Three Methods

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Figure 1.

Figure 1. Upside Gap Three Methods pattern.

Japanese name: uwa banare sanpoo hatsu oshi
Forecast: bullish continuation
Trend prior to the pattern: uptrend
Opposite pattern: Downside Gap Three Methods

Construction:

  • First candle
    • a candle in an uptrend
    • white body
  • Second candle
    • white body
    • the low above the prior high (gap)
  • Third candle
    • black body
    • the opening price within the prior body
    • the closing price within the body of the first line (gap close)

 

The Upside Gap Three Methods is a three-line bullish continuation pattern belonging to the tasuki patterns family. It is a variant of the Upside Tasuki Gap pattern, but the price gap between the two white candles is closed.

Although the price gap between the two white candles is closed, the pattern is classified as a bullish continuation one. The pattern should be confirmed, that is the price should move above the second line closing price. In other words, the third line being black candle needs to be negated.

Two last lines may form the Bearish Tasuki Line pattern which is a bearish reversal pattern. If such situation happens, then the market context should play the most important factor.

 

Figure 2.

Figure 2. The first occurrence of a Long White Candle (acting as the Bullish Strong Line pattern), appearing within an uptrend, significantly moves price higher (around +15%). At that moment, the market does not yet know that this candle will become the first line of an Upside Gap Three Methods. The following candle closes even higher. When the third line of the Upside Gap Three Methods is formed, it turns out that a Bearish Tasuki Line also appears. In other words, we have two conflicting patterns: bullish and bearish.
All three candles were formed at a very high trading volume. Although any scenario is possible, the bulls quickly demonstrate that are in control of the stock and a Bullish Strong Line pattern is formed.
Some traders are taking profits, but price is not going below the Bullish Strong Line acting as a support area.

 

Figure 3.

Figure 3. An Upside Gap Three Methods and a Bearish Tasuki Line patterns appear in a strong uptrend. The problem is, however: which pattern should be followed? The bullish one (Upside Gap Three Methods) or the bearish one (Bearish Tasuki Line)?
The answer is that we should wait for confirmation on the following candles. In our case a Bullish Engulfing pattern appears, which seems to confirm bearish forecast. However, it takes some time until the bears control the stock.

 

Upside Gap Three Methods statistics

Below you can find some Upside Gap Three Methods pattern statistics calculated by CandleScanner software.

Pattern name: Upside Gap Three Methods
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 (Upside Gap Three Methods): 112
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Upside Gap Three Methods): 0.02 %
Average frequency: 19,968.0
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 21 27 25 39
% of
Occurrences
0.00 % 18.75 % 24.11 % 22.32 % 34.82 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 21 19 18 54
% of
Occurrences
0.00 % 18.75 % 16.96 % 16.07 % 48.22 %

 

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
ADS 1 3,536.0 1 100.00 % 1 100.00 %
EBAY 1 4,218.0 1 100.00 % 1 100.00 %
MET 1 3,832.0 0 0.00 % 1 100.00 %
PLD 1 4,428.0 1 100.00 % 1 100.00 %
PRU 1 3,409.0 1 100.00 % 1 100.00 %
NFX 3 1,676.7 2 66.67 % 2 66.67 %
AMP 2 1,226.0 0 0.00 % 1 50.00 %
BWA 2 2,517.0 1 50.00 % 1 50.00 %
CHRW 2 2,227.5 1 50.00 % 1 50.00 %
DVN 2 2,517.0 1 50.00 % 1 50.00 %

 

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
BRK.B 2 2,409.0 2 100.00 % 2 100.00 %
ICE 1 2,420.0 1 100.00 % 1 100.00 %
MA 1 2,290.0 1 100.00 % 1 100.00 %
BWA 2 2,517.0 1 50.00 % 1 50.00 %
CSCO 2 2,517.0 1 50.00 % 1 50.00 %
DVN 2 2,517.0 1 50.00 % 1 50.00 %
HP 2 2,517.0 1 50.00 % 1 50.00 %
PHM 2 2,517.0 1 50.00 % 1 50.00 %
NFX 3 1,676.7 1 33.33 % 1 33.33 %
Pattern name: Upside Gap Three Methods
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 (Upside Gap Three Methods): 29
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Upside Gap Three Methods): 0.02 %
Average frequency: 21,173.6
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 2 8 10 9
% of
Occurrences
0.00 % 6.90 % 27.59 % 34.48 % 31.03 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 2 6 7 14
% of
Occurrences
0.00 % 6.90 % 20.69 % 24.14 % 48.27 %

 

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
CCE 1 1,258.0 0 0.00 % 1 100.00 %
CMA 1 1,258.0 0 0.00 % 1 100.00 %
CVC 1 1,258.0 1 100.00 % 1 100.00 %
HON 1 1,258.0 1 100.00 % 1 100.00 %
INTU 1 1,258.0 0 0.00 % 1 100.00 %
IPG 1 1,258.0 0 0.00 % 1 100.00 %
LLY 1 1,258.0 1 100.00 % 1 100.00 %
MS 1 1,258.0 1 100.00 % 1 100.00 %
PFG 1 1,258.0 1 100.00 % 1 100.00 %
PLD 1 1,258.0 1 100.00 % 1 100.00 %

 

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
ICE 1 1,258.0 1 100.00 % 1 100.00 %
SWK 1 1,258.0 1 100.00 % 1 100.00 %

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