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Nikita (SEBI RA)

30th Sep · SEBI-Registered Analyst

Downside Gap Three Methods – Bearish Continuation

📊 The Downside Gap Three Methods confirms a bearish continuation during a strong downtrend. ✅ Formation (3 candles): 1️⃣ First → Long red candle. 2️⃣ Second → Another red candle with a gap down. 3️⃣ Third → Green candle opening within 2nd candle’s body but failing to close the gap. ✅ Meaning: Buyers tried to push price up but failed → sellers remain in control. 📌 Example: Stock drops ₹300 → ₹270, then gap down to ₹260, small green candle closes ₹262 → Downside Gap Three Methods → downtrend intact. 🧠 Rule: Gap should remain unfilled for pattern validity.

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