As of 08/06/2020
  Indus: 27,387 +185.46 +0.7%  
  Trans: 10,331 +115.68 +1.1%  
  Utils: 829 +3.50 +0.4%  
  Nasdaq: 11,108 +109.67 +1.0%  
  S&P 500: 3,349 +21.39 +0.6%  
YTD
-4.0%  
-5.2%  
-5.7%  
 +23.8%  
 +3.7%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow10,600 or 9,400 by 08/15/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,355 or 3,100 by 08/15/2020
CPI (updated daily): Arrows on 6/29/20
As of 08/06/2020
  Indus: 27,387 +185.46 +0.7%  
  Trans: 10,331 +115.68 +1.1%  
  Utils: 829 +3.50 +0.4%  
  Nasdaq: 11,108 +109.67 +1.0%  
  S&P 500: 3,349 +21.39 +0.6%  
YTD
-4.0%  
-5.2%  
-5.7%  
 +23.8%  
 +3.7%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow10,600 or 9,400 by 08/15/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,355 or 3,100 by 08/15/2020
CPI (updated daily): Arrows on 6/29/20

Bulkowski on the Bearish Separating Lines Candle Pattern

 

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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-- Tom Bulkowski

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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.

Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

Bearish Separating Lines: 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.

The ideal bearish separating lines candlestick
Bearish Separating Lines

Top of page More

Bearish Separating Lines: 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.

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.

Bearish Separating Lines: Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternDownward.
ConfigurationLook for a tall white candle in a downward price trend followed by a tall black candle. The opening price of the two candles should be similar.

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Bearish Separating Lines: 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. 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: Example

The bearish separating lines candlestick on the daily scale

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.

The breakout from this bearish separating lines is downward when price closes below the bottom of the two-day candle. Since price enters from the top trending down and breaks out downward, this candlestick is a continuation pattern. It continues the downtrend already underway.

-- Thomas Bulkowski

Top of page More

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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