What is Upside Tasuki Gap?

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An Upside Tasuki Gap is a three-bar candlestick formation that is commonly used to signal the continuation of the current trend.The first bar is a large white/green candlestick within a defined uptrend.The second bar is another white/green candlestick with an opening price that has gapped above the close of the previous bar.The third bar is a black/red candlestick that partially closes the gap between the first two bars.

Definition

The Rising Three Methods Gap is a candlestick pattern consisting of three candles, typically used to predict the continuation of the current trend. It is a tool in technical analysis for identifying market trends.

Origin

This pattern originates from Japanese candlestick charting techniques, first developed by Japanese rice merchants in the 18th century. Over time, this technique was adopted and evolved by Western market analysts.

Categories and Features

The Rising Three Methods Gap is a type of candlestick pattern characterized by the following: the first candle is a large bullish candle (white/green) in a clear uptrend; the second candle is another bullish candle (white/green) that opens above the previous candle's close, creating a gap; the third candle is a bearish candle (black/red) that partially fills the gap between the first two candles. This pattern typically indicates that the market's upward trend will continue.

Case Studies

Case Study 1: In 2020, Tesla's stock exhibited a Rising Three Methods Gap pattern after a period of upward movement. The first candle showed a strong upward trend, the second candle gapped up, and the third candle retraced but did not completely fill the gap, after which the stock price continued to rise. Case Study 2: In 2019, Apple Inc. also displayed a similar pattern, and market analysts used this pattern to predict further increases in its stock price.

Common Issues

Common issues investors face when applying the Rising Three Methods Gap include misjudging the formation conditions of the pattern and ignoring the influence of other market factors. It is recommended to use this pattern in conjunction with other technical indicators to improve prediction accuracy.

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