Bullish Abandoned Baby
The Bullish Abandoned Baby or sometimes referred to as Abandoned Baby Bottom sounds made up. The first time I heard about it I put it up there with “Ichimoku Cloud System”. Just like many things in the stock investing world there is sometimes a weird name to a solid trading pattern.
The Bullish Abandoned Baby is a signal that there is a potential reversal that is about to occur in the current price trend. The candlestick pattern is created by three specific type of candlesticks.
The first candle is going to be a large bearish candlestick that is typically located within a downtrend.
The second candlestick is going to be a small Doji-like candle that gaps down below the close of the first candlestick. Now sometimes these candles won’t be full Doji’s (a plus sign) and it can be a small bodied candle.
The last candlestick in the Bullish Abandoned Baby pattern is going to be a large bullish candle that opens above the middle Doji and typically closes right around where the first candle opened.
Here is what this looks like in action:
Something to keep in mind is that this candlestick pattern is typically not seen in your day to day chart analysis. It’s rarely scanned but when it is the pattern is thought to be very reliable. It can allow the trader to make a great play and be in a position to profit.
As with any other pattern that is found in your chart analysis, it is very important to combine your candlestick knowledge with a technical indicator. The best indicators for candlestick patterns on a reversal trend is momentum. These can be Ultimate Oscillator, RSI or even the MACD.