Rising Window (Gap)Pattern Type: Bullish

Rising Window (Gap)
Pattern Type: Bullish
The Rising Window, commonly known in Western technical analysis as the “Gap Up,” is a bullish candlestick pattern indicating a potential continuation of the current uptrend. This pattern is characterized by a gap between the high of one session and the low of the following session, with no overlap in prices. The presence of this window or gap provides a strong indication of bullish sentiment in the market.

What The Pattern Looks Like
The Rising Window pattern consists of:

  1. A candle, either bullish or bearish, followed by a gap where the next candle opens.
  2. A subsequent candle that opens above the high of the previous session, leaving a clear gap or “window” between the two sessions.

It’s essential that this window remains unfilled, meaning no trading activity should overlap into the gap area for the pattern to remain valid. If future candles close the gap, it can negate the bullish implication of the Rising Window.

Pattern psychology
The psychology behind the Rising Window (Gap Up) pattern unfolds as:

  1. Before the Gap: Leading up to the gap, the prevailing sentiment might be mixed, or there could already be a bullish undertone depending on the previous trend.
  2. Formation of the Gap: The appearance of the gap signifies a sudden and strong surge in demand for the asset, such that the opening price is markedly higher than the previous session’s high. This could be due to positive news, strong earnings reports, or any other influential factors.
  3. After the Gap: If prices continue to rise or stay above the gap without filling it, it’s an affirmation of strong bullish sentiment. However, if prices start to move back and fill the gap, it may indicate weakening bullish momentum.

What The Pattern Looks Like

An Example Of The Pattern In A Graph
The Rising Window serves as a visual representation of a period where supply and demand dynamics shifted heavily in favor of demand, causing a jump in price. The continued maintenance of this gap showcases sustained bullish sentiment, as sellers aren’t pushing prices back down to fill the gap, and buyers are willing to purchase at these elevated levels.

Leave a Comment