The Bearish Advance Block is a candlestick pattern that signals a potential weakness in a prevailing uptrend. It is characterized by three consecutive bullish candlesticks that appear to advance the ongoing uptrend but display inherent signs of weakening momentum. This pattern is crucial for traders as it can serve as an early indication that the bullish trend might be losing its strength and a reversal could be imminent.
The first candlestick in this formation is a strong bullish candle, indicating a clear continuation of the prevailing uptrend. This is followed by a second bullish candle that still advances the trend but opens below the close of the first candlestick, signifying a slight reduction in the buyers’ momentum.
The third candlestick is again bullish and opens below the close of the second candle, further amplifying the notion of decreasing bullish momentum. The bodies of the second and third candlesticks progressively decrease in size, reflecting the diminishing strength of the bulls in the market.
In our function Bearish Advance Block, the pattern is identified by checking the following conditions:
up Candle function for each day.This pattern serves as a warning to traders and investors that the current uptrend might be losing steam, and caution should be exercised. A confirmation of the trend reversal, through other technical indicators or a subsequent bearish candlestick, could warrant a strategy to exit long positions or consider short positions to capitalize on the anticipated downtrend.