Bulkowski’s Bullish Kicking

Written and copyright © 2008-2009 by Thomas N. Bulkowski. All rights reserved.

In my book, Encyclopedia of Candlestick Charts, pictured on the right, I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines in the tests.

The book takes an in-depth look at 103 candlestick patterns and reports on behavior and rank (3 types: reversal rate, frequency, and overall performance), identification guidelines, performance statistics (tables of general statistics, height, and volume), trading tactics (tables of statistics on reversal rates and performance indicators), and wraps each chapter with a sample trade. I share a sliver of that information below. If you like what you read here, then you will love the book. Help support this website and buy a copy by clicking on the above link.

The bullish kicking candlestick pattern is composed of two marubozu candlesticks: a black one as the first candle followed by a white one with an upward gap between. The candlestick acts as a bullish reversal both in theory and in reality, but only 53% of the time. That is what I call "near random."

As you might imagine, two marubozu’s with a gap between is a rare combination, ranking 100th out of 103 candle types, where 1 is most frequent. The overall performance is a weak 96 out of 103, too. That suggests the post breakout trend is short.

Important Results

Theoretical performance: Bullish reversal Tested performance: Bullish reversal 53% of the time Frequency rank: 100 Overall performance rank: 96 Best percentage meeting price target: 52% (bull market, up breakout) Best average move in 10 days: 2.78% (bull market, up breakout) Best 10-day performance rank: 57 (bull 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.

Bullish Kicking

Discussion

The bullish kicking candle acts as a bullish reversal of the existing price trend 53% of the time. That is almost random, so do not try to guess the breakout direction from this candle pattern. The candle has a frequency rank of 100 out of 103. That means the candle was rare enough that I only included partial statistics in my Encyclopedia of Candlestick Charts book. The overall performance 10 days after the breakout is 96, probably due to the dearth of samples.

The best average move 10 days after the breakout was a rise of 2.78% in a bull market. That move ranked 57. I consider moves of 6% or more to be good, so this is well short of the mark. It says that the price trend after the breakout tends to remain weak.

Identification Guidelines

Three Trading Tidbits

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.

1. The candle breaks out upward most often -- page 457.
2. Select tall candles for the best performance -- page 455.
3. Breakouts below the 50-trading day moving average result in the best performance -- page 457.

Example

Circled in red is a bullish kicking candlestick on the daily scale. This one appears in a brief downward retrace of the up trend. When price breaks out upward, a bullish reversal confirms and price rejoins the upward move already underway.

The chart shows a good example of the black and white marubozu candles. The first one is a tall black marubozu. That is a candle without any shadows. An upward gap appears between the black and white candles. A white marubozu candle follows as the second line of the pattern, and it also has no shadows.

This chart is an example of the preferred setup for the bullish kicking candlestick pattern, that of a bearish retracement in an upward price trend. You will find that when price breaks out in the direction of the primary trend, your trades are more likely to be successful.

-- Thomas Bulkowski