What it is
The Upside Tasuki Gap is a bullish continuation pattern consisting of three candles. It starts with two bullish candles where the second gaps above the first, followed by a bearish candle that opens within the second candle's body and closes within the gap between the first two candles — but does not fully close the gap.
The key to this pattern is the gap that remains open. The bearish third candle represents a pullback or profit-taking attempt, but the inability to close the gap shows that bullish momentum remains dominant. The unfilled gap acts as a support zone, confirming the uptrend's strength.
The psychology
The Upside Tasuki Gap reveals a trend that's too strong for profit-takers to derail. The first two bullish candles with a gap between them show aggressive buying — the gap itself is a statement of bullish conviction.
The third candle is bearish, opening within the second candle and selling off into the gap. This is the natural counter-reaction: some traders take profits, others test whether the gap will fill. It's the market probing for weakness.
But the gap doesn't fill. The third candle closes within the gap but doesn't close it, proving that buyers are defending the gap as support. An unfilled gap in an uptrend is one of the strongest continuation signals in candlestick analysis — the Tasuki Gap formalizes this principle into a tradeable pattern.
Identification
- 01Prior uptrend — Must appear within an established bullish trend
- 02First candle is bullish — Continues the uptrend
- 03Second candle gaps up and is bullish — Gap between candles 1 and 2
- 04Third candle is bearish — Opens within the second candle's body
- 05Third candle closes within the gap — Enters but does NOT fill the gap
- 01Gap remains mostly intact — More of the gap preserved = stronger signal
- 02Volume declines on third candle — Selling lacks conviction
- 03Clean gap with no overlap — Clear space between candles 1 and 2
- 04Fourth candle resumes the uptrend — Additional confirmation
- 01Third candle fills the gap completely — Gap closure negates the signal
- 02Third candle closes below the first candle's close — Too deep a correction
- 03Heavy volume on the third candle — Aggressive selling may signal reversal
- 04No prior uptrend — Pattern requires bullish trending context
Execution framework
Conservative: Enter long above the second candle's high after the third candle holds the gap.
Aggressive: Enter long at the close of the third candle when it's clear the gap will hold.
Below the unfilled portion of the gap — specifically below the first candle's close. If the gap fills completely, the pattern has failed.
T1: Measured move equal to the gap distance projected from the third candle's close. T2: Next significant resistance level.
Minimum 1:1.5. The tight stop (gap level) often provides excellent risk:reward.
Context matters
The Upside Tasuki Gap is a bullish continuation pattern that signals a brief pullback within an uptrend that fails to close the gap - confirming buyers remain in control. Its effectiveness depends on the strength of the existing trend and whether the gap truly holds.
- 01Within a strong, established uptrend with clear momentum
- 02When the bearish candle fails to close the gap (critical requirement)
- 03Volume is strong on the gap-up candle and lighter on the pullback
- 04Above rising moving averages that provide dynamic support
- 05In a trending market with broad sector or index confirmation
- 06When the next candle after the pattern confirms by moving higher
- 01When the bearish candle fully closes the gap (pattern invalidated)
- 02In a choppy or range-bound market without trending momentum
- 03If the gap was caused by low liquidity rather than strong buying
- 04Near major overhead resistance where the uptrend may stall
- 05Late in an extended rally where exhaustion gaps are common
- 06Without follow-through buying in the candles after the pattern
Gap up followed by bearish candle that doesn't fill. Bulls maintaining control despite the pullback.
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