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Bearish Separating Lines Candle Pattern

The bearish separating lines candlestick pattern reminds me of the meeting lines candlestick except for two things: The behavior and candle colors are different.

The bearish separating lines is a bearish continuation pattern. For a two line candle, the bearish separating lines combination is rare, so you will have a difficult time finding examples. Overall performance is just mid list, too, so you might think that it was not be worth the hunt. However, the candle does very well after an upward breakout.

Bearish Separating Lines Candlestick: Important Results

Theoretical performance: Bearish continuation Tested performance: Bearish continuation 63% of the time Frequency rank: 82 Overall performance rank: 40 Best percentage meeting price target: 67% (bull market, up breakout) Best average move in 10 days: 8.36% (bear market, up breakout) Best 10-day performance rank: 5 (bear market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Bearish Separating Lines

Bearish Separating Lines Candlestick: Discussion

The bearish separating lines candlestick acts in theory as it does in reality, as a bearish continuation of the exiting price trend 63% of the time. That is quite good. As I mentioned in the introduction, the candle is rare as demonstrated by a frequency rank of 82 out of 103 candle types.

The overall performance rank is 40, which is about mid list. However, the bearish separating lines candlestick performs best after upward breakouts. You will want to avoid those with downward breakouts because performance is lousy.

Bearish Separating Lines Candlestick: Identification Guidelines

Bearish Separating Lines Candlestick: Three Trading Tidbits

The average rise 10 days after the breakout in a bear market is 8.36%, ranking 5th. I consider moves of 6% or higher to be good, so this is superb.

1. Bearish separating lines candles that appear within a third of the yearly low perform best — page 644.
2. Select tall candles for the best performance — page 645.
3. Price breaks out downward most often — page 647.

Bearish Separating Lines Candlestick: Example

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

The chart shows bearish separating lines candlestick circled in red on the daily scale. The downward price trend begins in mid June, then goes horizontal into July before resuming the down swing when the bearish separating lines appear. The first candlestick is a tall white one. A tall black candle, which does not appear to be tall but is when taken into the context of the many small candles in early July, shows and the opening prices match between the black and white candles.

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