The side-by-side white lines are found during an up-trend and it is important to note that this pattern is a very strong continuation pattern. Two white (or green) candles form side-by-side after a gap up from the previous white (or green) candle. Narabi in Japanese means “in a row” which also means “whites in a row.” Side-by-Side Lines, whether black or white, indicate a pause or stalemate when they are observed alone and they occur after a gap in the trend’s direction.
SIDE-BY-SIDE WHITE LINES (BULLISH AND BEARISH)
Criteria for the Side-by-Side White Lines
- An uptrend is in progress and a gap occurs between two candles of the same color.
- The color of the first two candles is the same as the prevailing trend.
- On the third day, a candle opens at the same open price or near the open price of the previous day.
- The third day closes near the close of the previous day.
Pattern Psychology Behind the Side-by-Side White Lines
During an up-trend, a white (or green) candle gaps up from the white (or green) candle of the previous day. The following day opens at the open of the gap up; however, it is persistent in maintaining the up-ward move again. This indicates that the bears are trying to turn the trend around, but instead they lose to the bulls almost immediately. This side-by-side white lines pattern is somewhat rare, however its meaning is clear. It is also important to note that the bearish side-by-side white lines pattern is even rarer than its bullish counterpart. It indicates that a short covering is occurring and when the sellers step in again, even more short covering occurs. Finally when the short covering is over, the downtrend continues.
The psychology built into a major candlestick signal is simple common sense investment philosophy. When you learn how to utilize the candlestick patterns correctly you now have the knowledge to improve your trading techniques for those trading entities you want to trade. You do not have to depend on canned programs that sometimes work and sometimes don’t work and you do not have to buy or sell stock recommendations blindly based on a research analyst’s recommendation.
Throughout his investment career, Stephen Bigalow has directed his investment acumen towards developing improved methods for extracting profits from the investment markets. His research, encompassing all fundamental and technical methods, resulted in verifying that Candlestick analysis was superior to any other method.
