Jump to content
  • 0

What is a Bullish Abandoned baby?


Mark Michaels
 Share

Question

3 answers to this question

Recommended Posts

  • 0

The Bullish Abandoned Baby is a reversal candlestick formation. Investors use this pattern as it indicates a potential reversal in the current trend. The pattern is constructed of 3 candlesticks in a row.

The first day (if a daily time frame is a reference) is a black candle and it’s in the direction of the primary trend.  The next day is a doji candlestick - which gaps below the closing of the first day. The final day is a white candle. There must be a price gap between the top of the doji and the surrounding two candles in order for this pattern to be valid. (see picture below)





One of the most positive sides of the abandoned baby pattern is that if you spot it on the chart, you can trade it right away because the pattern is usually very reliable, however, it is best used in conjunction with other technical indicators such as the MACD and RSI.

As always, a placement of stop loss order is advised to protect your trade and investment. The proper spot of your stop order should be below the wick of the middle candle of the formation. If one would prefer a more aggressive stop order, they could place a stop below the third bar of the pattern.

Traders can use a profit target at a Fibonacci retracement level. One might set a profit target between 38.2% - 61.8% retracement levels of the downtrend that comes just before the bullish abandoned baby pattern.

Link to comment
Share on other sites

  • 0

Hey Mark,

The investment banking giant, Morgan Stanley, recently commented on low-cost air carriers, saying Ryanair and Wizz Air are the best investment opportunities in terms of risk and reward, and that easyJet could become an attractive option if demand recovers quicker than anticipated.

Stocks of airline companies have rallied as global authorities started lifting travel bans, resulting in a 30% sector rise over the past two weeks. There’s a great difference in performance among air carriers in this year, varying from -19% for Ryanair to -60% for IAG, according to Morgan Stanley.

"At this point, we continue to see a better risk-reward in Ryanair and Wizz, though we think that if the recovery in demand is faster than our estimates easyJet could be an attractive investment option also," said Carolina Dores, an analyst at Morgan Stanley.

Countries like Spain, Italy, Greece, Cyprus and Portugal are lifting travel restrictions and planning to bring hotels and beaches back to service in July and August. As a result, shares of RyanAir advanced almost 12%.

The largest German airline, Lufthansa, is a step closer to securing the €9bn bailout from German authorities after the company’s supervisory commission approved the bailout package on Monday.  

Ryanair plans to appeal the funding plan. The company’s Chief Executive, Michael O’Leary, said the “illegal state aid” will let Lufthansa participate in below-cost selling and “distort” competition in the market.

According to analysts, easyJet is the cheapest while the Lufthansa is the most expensive when comparing share prices against earnings estimates, while Ryanair and WizzAir remain 12-19% below historical multiples. One of the reasons for such difference is because investors are worried about which carriers will have to mobilize capital, Morgan Stanley stated. 
 

Link to comment
Share on other sites

  • 0

Hey Mark,

The Bullish Abandoned Baby is a reversal candlestick pattern, consisting of three candles. The pattern takes shape at the bottom of a trend. To help you identify the pattern, the first candle can be any long and bearish candle. The second candle should be small and a bearish candle, or a Doji candle. Finally, the last candle can be any long and bullish candle.

I should mention that the second candle doesn’t overlap the other two candles, and as a result, a gap forms.
 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...