There are three possible cases of bearish confirmation. You have to follow the session closely to see if these cases will hold or not.
The market opens with a downward gap, signaling a bearish sentiment in the first case. Your benchmark will be the opening price. If the prices stay below the benchmark, sell your shares. Any black candlestick with a downward gap is a valid bearish confirmation criterion.
In the second case, the market opens at a level, equal to or above the previous day’s close. The benchmark is that closing price. If prices during the session stay below the benchmark, sell your shares. Any black candlestick closing below the previous day’s close is the second confirmation criterion.
If, however, in both cases, the prices during the session start going over the benchmark avoid selling.
The third case of confirmation is rarely observed. The market opens with a big upward gap suggesting a very bullish day, and the day ends with a black candlestick, but still closing above the previous day’s close. Such a day satisfies the third confirmation criterion and the closing price of the black candlestick is the benchmark.
If one of the three confirmation criteria is not fulfilled, or in case of a white candlestick or a doji on the confirmation day, the SELL-IF alert remains valid, however, without confirmation and the three confirmation criteria are then sought in the following day. The only exception is the long white candlestick. Any white candlestick following a SELL-IF alert makes the signal void and invalid.
