| Candlestick
Three River Morning Pattern
Bullish Reversal - Potential Buy
Signal
Support Found @ Body of Middle
Bar
 The
Three River Morning Star pattern formation occurs when
a black candle is followed by a gapping star (any color),
then followed by a white candle that is gapping above
the star candle. This pattern formation represents a
potential market bottom formation, and/or a buy signal.
This pattern formation is unique because it not only
identifies a potential market bottom, but it identifies
a support level. The support is found at, or near, the
low of the star candle.
The
Three River Morning Star pattern is somewhat rare and
can sometimes be found within a consolidating market.
When the Three River Evening Star pattern is found after
an extended bearish trend, it will often identify a
potential market bottom. When the Three River Morning
Star pattern is found within market consolidation, one
should not expect the market to form a bottom and immediately
rally. If the Three River Morning Star pattern is found
within market consolidation and the Doji Star is well
below the consolidation level, one should expect the
support level to hold and the market to eventually rally.
This
pattern will also be precluded by a Doji Star pattern
formation. The Doji Star pattern will form prior to
the completion of the Three River Morning Star pattern.
Doji Star patterns are typically found at, or near,
market tops or bottoms. Although, sometimes a Doji Star
pattern can form within a trend as the market attempts
to break above or below a previous support or resistance
level.
The
story behind the Three River patterns is as follows:
In Japan, there were three rice farmers on three separate
rice farms, all separated by a river which joined between
their farms. One day, the farmers began fighting for
control of each others land to grow more rice. The battle
continued for many days until one farmer managed to
takeover one of the other farmers rice fields. The farmer
who gained control of two rice farms had the obvious
advantage and finally took over the last rice farm.
CONTINUE
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