Abandoned Baby Bullish Complete Guide

What is Abandoned Baby Bullish?

The Bullish Abandoned Baby is a rare but highly potent three-bar reversal pattern that occurs at the bottom of a downtrend. It is characterized by a specific sequence: a large bearish candle, followed by a Doji that gaps significantly lower, and finally a large bullish candle that gaps higher. The defining feature—and what distinguishes it from a standard Morning Doji Star—is the presence of gaps on both sides of the middle candle. Specifically, the shadows (wicks) of the Doji must not overlap with the shadows of the first or third candles. This 'abandonment' of the Doji represents a complete exhaustion of selling pressure followed by a sudden shift in sentiment. From a psychological perspective, the first candle shows the bears are in control. The gap down on the second day suggests a panic sell-off, but the Doji indicates indecision as bulls and bears reach equilibrium. The gap up on the third day confirms the reversal, trapping short-sellers. According to Thomas Bulkowski’s research in the 'Encyclopedia of Candlestick Charts,' this pattern is exceptionally rare but performs very well, with a theoretical reversal rate of approximately 70%. Bulkowski notes that while it is a strong performer, its rarity makes it difficult to find in modern liquid markets. Steve Nison, who introduced Japanese candlesticks to the West, emphasizes that the gaps (or 'windows') are crucial; without the clear separation of shadows, the pattern is merely a Morning Star. Volume typically spikes on the first or third day, confirming the intensity of the reversal.

Identification Rules

1. The market must be in a clear primary downtrend prior to the pattern formation.
2. The first bar must be a long bearish (black or red) candlestick.
3. The second bar must be a Doji, and its shadows must not overlap with the shadows of the first or third bars.
4. The third bar must be a long bullish (white or green) candlestick that gaps up from the Doji.

References

• Thomas N. Bulkowski (2005). Encyclopedia of Chart Patterns.
• Steve Nison (2001). Japanese Candlestick Charting Techniques.

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