Up/Down Gap Side-by-Side White Lines

What Is Up/Down Gap Side-by-Side White Lines?

The up/down gap side-by-side white lines is a three-candle continuation pattern that occurs on candlestick charts.

Understanding Up/Down Gap Side-by-Side White Lines

The up version is a large up (white or green) candle followed by a gap and then two more white candles of similar size to each other. The down version is a large down (black or red) candle followed by two white candles of similar size. When the pattern occurs, which is rare, it is expected that the price will continue moving in the current trend direction — down or up, as the case may be.

The up gap side-by-side white lines is a bullish continuation pattern with the following characteristics:

1. The market is in an uptrend.
2. The first candle is a white candle.
3. The second candle opens above the close of the first candle (gap up).
4. The third candle has a real body with the same length as the second candle with an open that's at the same level or higher than the real body of the first candle.

The down gap side-by-side white lines is a bearish continuation pattern with the following characteristics:

1. The market is in a downtrend.
2. The first candle is a black candle.
3. The second candle is a white candle that opens below the close of the first candle (gap down).
4. The third candle is a white candle with a real body that's the same length as the second candle and opens at the same level or lower than the real body of the first candle.

The side-by-side white lines pattern is moderately accurate in predicting a continuation of the current trend, but it is somewhat uncommon. A continuation occurs 66% of the time. The pattern doesn't always produce large price moves. A little over 60% of the patterns produced a 6% average move in 10 days, and those patterns occurred in downtrends with a downside breakout from the pattern (downtrend continuation). Patterns occurring in other contexts didn't have price moves as large, according to Thomas Bulkowski's candlestick research.

Other chart patterns or technical indicators should be used to confirm the candlestick pattern to maximize the odds of success.

Many traders opt to wait for confirmation from the pattern. Confirmation is price movement that confirms the expectation of the pattern. For example, following an up gap side-by-side white lines pattern, a trader may wait for the price to move above the highs of the pattern before initiating a long position. A stop loss could then be placed below the low of the second or third candle or even the first candle in order to give the trade more room.

The difference between up/down gap side-by-side white lines and a three outside up/down candlestick pattern is that, unlike the former pattern, the latter is a reversal pattern, not a continuation pattern. In the outside up pattern, a black candlestick is followed by two white candles. In the outside down pattern, a white candle is followed by two black candles.

Up/Down Gap Side-By-Side White Lines Psychology

Up Gap Side-By-Side White Lines Example

The Apple Inc. (AAPL) daily chart shows an example of the up gap version of the candlestick pattern.

Image by Sabrina Jiang © Investopedia 2021

Coming off a swing low, the price has a large up candle followed by a gap and then two additional side-by-side up candles. The next day (fourth candle), the price continued to rally, moving above the high of candles two and three. This provided confirmation that the uptrend was continuing. The rally lasted a few more days before drifting sideways.

Up/Down Gap Side By Side White Lines Limitations