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A five-candle reversal. Gap down, stall, then explosion higher closing the gap. The breakdown failed.
The Bullish Breakaway is a five-candle reversal pattern that signals the end of a downtrend. It begins with a large bearish candle, followed by a gap down and three more bearish candles with diminishing momentum, and ends with a large bullish candle that closes into the gap created after Candle 1.
The pattern mirrors the Bearish Breakaway. Selling exhaustion builds over five candles as bearish bodies shrink, then a powerful bullish candle 'breaks away' from the declining sequence and recovers the gap. Sellers have spent their energy, and buyers are taking control.
The Bullish Breakaway is the mirror image of bearish exhaustion. Candle 1 is a strong bearish candle confirming the downtrend. Candle 2 gaps down — sellers are pushing aggressively. The downtrend seems to be accelerating.
Candles 3 and 4 continue lower, but the bodies shrink. Bears are still selling, but each candle makes less progress. The selling is decelerating — like a ball thrown in the air losing momentum before it starts to fall back.
Candle 5 is the reversal. A large bullish candle surges upward, closing within or above the gap between Candles 1 and 2. The sudden reversal catches shorts off-guard and triggers a short squeeze. The downtrend's exhaustion is confirmed and a bottom may be forming.
Conservative: Enter long when Day 5 closes above Day 1's open (gap closed).
Aggressive: Enter long during Day 5 when it breaks above the gap.
Below the low of the first candle in the pattern (the gap candle). If price falls back below this level, the bullish breakaway is invalidated.
T1: Previous resistance level. T2: Measured move equal to the five-candle pattern range projected upward. The multi-candle momentum buildup often sustains, so trail a partial position.
Minimum 1:2. The strong momentum shift typically produces follow-through.
The Bullish Breakaway mirrors its bearish cousin. Its power lies in the five-candle exhaustion narrative — selling progressively weakens until a decisive bullish candle confirms the turn.
Long bearish candle followed by gap down and gradual recovery. The gap provides strong support.
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