Stomach Pattern Definition and Tactics

What is Above Stomach Pattern

The above stomach pattern is a two candlestick pattern which evolves over a period of two sessions. It requires a existing downtrend and usually appears at the bottom of a downtrend

Underlying Psychology Behind Above Stomach Pattern

The first day of the pattern, bears are still in control as we have a confirmed downtrend. Second day, price opens higher above the mid of point of previous filled candle and also closes above the mid point .This clearly indicates that sentiments have changed completely and further buying will happen in coming sessions.

Example of How to Use Above Stomach Pattern

above stomach pattern
Above Stomach Pattern

Examples of How to Trade Above Stomach Pattern

Decision: In case of Above stomach pattern,traders should start looking for buying opportunities, buy price should be around the close price of hollow candle after the filled candle.

Stop loss: What if the market reverse its direction after printing the above stomach pattern? The lowest low of the two candles making above stomach pattern will act as stop-loss in case that happen.

What Below Stomach Pattern

The below stomach pattern is a two candlestick pattern which evolves over a period of two sessions. It requires a existing uptrend and usually appears at the top of a uptrend.

Underlying Psychology Behind Below Stomach Pattern

The first day of the pattern, bulls are still in control as we have a confirmed uptrend. Second day, price opens lower, below the mid of point of previous hollow candle and also closes below the midpoint .This clearly indicates that sentiments have changed completely and further selling will happen in coming sessions.

Example of How to Use Below Stomach Pattern

Below Stomach Pattern
Below Stomach Pattern

Examples of How to Trade Below Stomach Pattern

Decision: In case of Below stomach pattern,traders should start looking for selling opportunities, sell price should be around the close price of filled candle after the hollow candle.

Stop loss: What if the market reverse its direction after printing the below stomach pattern? The highest high of the two candles making below stomach pattern will act as stop-loss in case that happen.

Main Points to Consider

  • If it appears at support/resistance, it will make for high probability setup.
  • Pattern with large body works better compared to the pattern with short bodies.

Beginner in Candlestick? Checkout below articles

Hope is a bogus emotion that only cost you money.

Jim Cramer

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