Bullish Separating Line Candlestick

Bullish Separating Line Definition

A bullish separating line is a bullish continuation pattern.  It is the exact opposite of the bearish separating line.  There are two components to the bullish separating line:

1. The first candlestick is a red candlestick
2. The second candlestick gaps up, opens at the first candlestick's open and closes strongly

The psychology of the setup is the longs and weak shorts jumped off the strong uptrend when the red candlestick printed on the chart.  However, this negative development was quickly put to rest as the security gaps higher and closes strongly on the very next bar.

How to Trade Bullish Separating Lines

Bullish separating lines should be traded during a strong uptrend.  Traders should make sure that the two candlesticks in the formation are of a decent size. A long position can be taken after the close of the second candlestick.

Bullish Separating Line Chart Example