This pattern consists firstly of a white Marubozu and then a black Marubozu. After the white Marubozu, the market opens below the prior session’s opening, forming a gap between the two lines.
How to identify
- 1st day is a white Marubozu.
- 2nd day is a red Marubozu and gaps open below the 1st day’s open.
The gap created by the 2nd day becomes a resistance area. Expect lower prices and for the gap to be tested before breaking back to the upside.