Trend Continuation Pattern
Before you can completely understand stock market patterns like the upside tasuki gap, you have to spend some time familiarizing yourself with the general candlestick charts and the information that they deliver about the market. Candlestick charts and patterns were first utilized by Japanese rice traders who were interested in making more accurate predictions about future prices in their industry. Over time, this type of tracking and evaluation became part of the greater school of technical analysis, which is widely used today, often in conjunction with the more traditional fundamental analysis.
Once you’ve developed an ability to monitor and interpret stock charts like the candlestick, you’ll be ready to take this skill one step deeper and start looking for patterns that will signal a shift, hold or trend in the stock’s performance. Being able to spot these will give you a greater ability to be proactive with your decisions to buy or sell.
The upside tasuki gap is known as a trend continuation pattern, which indicates that it will signal the continuation of prevailing uptrend, even if there is a corrective, or bearish, day. Look for two bullish candlesticks in a significant up trend, followed by a third bearish day in which the third candlestick’s real-body opens within this second-day candlestick’s body closes the gap that has formed between first and second day’s candlesticks.