the hAndbook of technIcAl AnAlysIsFigure 7.20 Bullish Three‐Bar Reversal on the Daily Chart of ITC Holdings Corp.
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In Figure 7.20, we observe a three bar bullish reversal occurring on the daily
chart of ITC Holdings Corp. The entire pattern occurs on an oversold condition
on the StochRSI. Note that the last bar closes between the Bollinger bands, which
is bullish. This pattern corresponds to pattern 5 in Figure 7.9.
In Figure 7.21, we observe a three bar bullish reversal occurring on the daily
chart of Newmont Mining Corp. Notice that the middle bar occurs on below av-
erage volume while the first and third bars close on high volume. The large third
bar closing near its high is an indication of added bullishness. This is followed by
a bearish outside day formation with the outside bar closing near its low on high
volume. Notice that the outside day formation engulfs four previous bars.
Figure 7.21 Bullish Three‐Bar Reversal on the Daily Chart of Newmont Mining
Corp.
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