*SCALPSWINGSTRADDLE*

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BIDU -$7 Pre-market on UBS downgrade

Baidu downgraded to Neutral from Buy at UBS
Target $567. :theflyonthewall.com

Note last 2 candles (bearish engulfing)





Definition:
The Bearish Three Outside Down Pattern is another name for the Confirmed Bearish Engulfing Pattern. The third day confirms the bearish trend reversal.

Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a Bearish Engulfing Pattern in the first two days.
3. Then we see a black candlestick on the third day with a lower close than the second day.

Explanation:
The first two days forms a Bearish Engulfing Pattern, and the third day confirms the reversal suggested by the Bearish Engulfing Pattern since it is a black candlestick closing with a new low for the three days.

Important Factors:
The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.