Bearish Counter-Attack Candlestick Pattern

What are bearish  counterattack lines?

The Counterattack Lines Pattern is a two-candle reversal pattern that appears on candlestick charts. This can happen during an uptrend or downtrend. In a bullish reversal during a downtrend, the first candle is a long black candle (low) and the second candle pulls away but then closes higher near the close of the first candle. This shows that sellers were in control, but could lose control as buyers could fill the void.

In a bear reversal during an uptrend, the first candle is a long white (rising) candle and the second candle goes up but then closes lower near the close of the first candle.

Counterattack candlestick pattern: an example

Understanding the model and what it means becomes much easier when you see it in action. So let's take a look. This is what the bullish counterattack pattern looks like.

Take a moment to look at this figure. The bearish candlestick is black while the bullish candlestick is white. Here you can see that prices are in a downtrend. The bears have a firm grip on the market and regularly push prices lower. The first black candle testifies to this. In line with the strong selling pressure in the trend, the white candle pulls away and continues to fall until it hits the session low. At this point, however, the bears lose momentum and the bulls flood the market, driving the price up significantly. Thanks to this strong demand from the bulls, the session ends higher towards the end of the previous day.

On this candlestick chart, you can see that prices are trending up. Bulls have a strong presence in the market and regularly push prices up. The chain of white candles testifies to this. In line with the high demand, the first black candle opens with a "gap up" expecting the price to continue rising. At this point, however, the bulls lose steam and give way to the entry of the bears. Sellers then flood the market and significantly reduce prices. Due to this intense selling pressure from the bears, the session ends in the negative near the end of the previous day.

What does the bearish pattern tell traders?

The bearish counterattack pattern predicts the reversal of the current trend. The appearance of the first bullish candle indicates that the uptrend will continue. The close of the second candle well above the open further confirms the uptrend. Bullish control is also indicated by the second candle, which creates a bullish gap from the close of the first candle. However, the opening of the first candle causes demand to drop, allowing the bears to continue pushing prices lower. Thus, it becomes clear that after the formation of the bearish counterattack candlestick, the uptrend will reverse in favor of the downtrend.

Bearish Counter Lines Traders Psychology

Suppose the market is in an active uptrend. The first candle is still going up, with the close well above the open, creating a really long body. This increases the confidence of the bulls and puts the bears on the defensive. Your caution is warranted at the open of the second candle, which differs from the close of the previous session. However, the opening reduces buying demand and allows the bears to lower the stock in a reversal session that ends near the end of the first candle. This price action indicates a possible bearish reversal that will be confirmed by the third or fourth candlestick Read More...

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