UK Accounting Glossary
The Downside Tasuki Gap starts with a bearish long body followed by another bearish body that has gapped below the first one. The third day of the Downside Tasuki Gap is bullish and opens within the body of the second day, then closes in the gap between the first two days, but does not fill the gap.
The first two candles of the Downside Tasuki Gap continue the (previous) downtrend with the second candle gapping down. This suggests a strong bearish sentiment. The third day sees buyers taking advantage of lower prices. But when the third day’s price action does not fill the gap created between the first and second days candles, candlestick analysts take this formation as a sign that the downward trend will likely continue.
Technical analysts like to see an additional bearish confirmation with the Downside Tasuki Gap formation. The confirmation of continued bearish trend should happen on day 4 and could come either in the form of another red candle or gap down at the opening.
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This glossary post was last updated: 23rd March 2020.