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A continuation pattern. Bullish candle followed by bearish candle opening at same price - separating from strength.
The Bearish Separating Lines is a two-candle continuation pattern that appears during a downtrend. A bullish candle (counter-trend rally) is followed by a bearish candle that opens at the same price as the bullish candle's open — then drops hard.
The matching opens are the key feature. Despite the bullish candle's attempt at a rally, the next session opens right back where the rally began and immediately resumes selling. It's as if the market said: 'Nice try, bulls — rejected.' The rally is erased and the downtrend continues.
Bearish Separating Lines show that counter-trend rallies are immediately punished. During a downtrend, Candle 1 is bullish — a relief rally that gives bulls temporary hope. Price closes higher, and some traders think a reversal may be forming.
But Candle 2 opens at the same level where Candle 1 opened (the matching open). This means the market gaps back to where the rally started overnight. All of the bullish candle's gains are immediately erased at the open.
Candle 2 then continues lower as a strong bearish candle, confirming that the downtrend is intact. The message is clear: bears are using every rally as a selling opportunity. The matching opens create a clear 'line of separation' between the failed rally and the resuming decline.
Conservative: Enter short on a break below Day 2's low.
Aggressive: Enter short at Day 2's close.
Above the high of the bearish candle. If price pushes above this level, the bearish continuation signal has failed.
T1: Recent swing low or nearest support level. T2: Measured move equal to the bearish candle's range projected downward. This is a continuation signal, so trail the stop using the prior candle's high.
Minimum 1:1.5. As a continuation pattern, it confirms existing momentum rather than starting new moves.
Bearish Separating Lines are a continuation signal — they confirm the existing downtrend rather than reversing it. The matching opens are the pattern's signature, showing that every counter-trend rally is immediately rejected.
Gap down to the prior bullish open level. If the gap fills, the bearish thesis is weakened.
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