Bullish Irikubi & Bearish Irikubi Pattern

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In Neck Pattern – Bullish Irikubi

Definition

A bullish Irikubi (line in the neck) structure is comprised of two Japanese candlesticks.

The first is a large bullish candlestick (green) followed by a small bearish candlestick (red) with a closing just below the closing level of the previous candlestick.

The second candlestick must be significantly smaller than the first.

Illustration

Characteristic

A bullish Irikubi often forms after a significant increase characterized by several large green Japanese candlesticks.

Significance

The in neck pattern (bullish Irikubi) is a continuation pattern, indicating a continuation of the bullish movement.

The small red candlestick signifies a hedge on long positions.

Note

For the structure to be validated, the next candlestick must be bullish and close above the opening price of the small bearish candlestick (red).

Invalidation

If the lowest point of the small bearish candlestick surpasses the next candlestick, the structure can be considered invalidated.

In Neck Pattern – Bearish Irikubi

Definition

A bearish Irikubi (line in the neck) structure is comprised of two Japanese candlesticks.

The first is a large bearish candlestick (red) followed by a small bullish candlestick (green) with a closing just above the closing level of the previous candlestick.

The second candlestick must be significantly smaller than the first.

Illustration

Characteristic

A bearish Irikubi often forms after a significant decline characterized by several large red Japanese candlesticks.

Significance

The in neck pattern (bearish Irikubi) is a continuation pattern, indicating a continuation of the bearish movement.

The small green candlestick signifies a hedge on short positions.

Note

For the structure to be validated, the next candlestick must be bearish and close below the opening price of the small bullish candlestick (green).

Invalidation

If the highest point on the small bullish candlestick surpasses the next candlestick, the structure can be considered invalidated.

Concluding Thoughts

The bullish and bearish Irikubi patterns, as in neck patterns, serve as important continuation signals within the context of ongoing trends.

While these patterns provide valuable insights into potential trend continuations, traders must always validate the structure with subsequent candlestick behavior to avoid false signals.

As with other candlestick patterns, combining these with additional technical indicators and analysis is recommended to strengthen trading strategies and enhance the accuracy of predictions.