The Abandoned Baby is also a well-known pattern that can be bullish or bearish. The bullish/bearish patterns are almost visually similar to the morning/evening star patterns, however, they are different and have their own characteristics.
The bullish abandon baby pattern is also known as a bullish reversal pattern. It is a pattern that forms at the end of a downtrend and indicates that there is a potential uptrend. The bullish abandon baby pattern consists of 3 candle components;
- The first candle is a large body bullish candle
- The second candle is a small body candle or a Doji that opens and closes at the same price level. The small body candle has a gap between the first bullish candle before opening and closing.
- The third candle is a large body bearish candle and has a gap between the small body candle before opening and closing.
The main psychology behind the formation of the bullish abandon baby candle pattern is that, on the daily chart, the first large body bullish candle which opens low and closes high shows that the buyers are still in control. The second candle on the next day which forms as a Doji or a small body candle with a big gap away from the first-day candle shows that there is indecision between buyers and sellers. The third candle on the next day which forms with a large body bearish candle shows that sellers are about to take control.
