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Upside Tasuki gap is a trend continuation pattern, which indicates the continuation of prevailing uptrend, even after a correction (bearish) day. Bullish Tasuki gap formation includes two bullish candlesticks and a bearish candlestick, and is a relatively rare candlestick pattern

The requirements of a bullish upside Tasuki gap pattern include,

• It should be formed in a significant uptrend.
• The first day should be a bullish day with long white (colorless) candlestick.
• The second day should also be bullish, and the price should open above a noticeable gap.
• The third day should be a bearish day. The candlestick real-body should open within second-day candlestick’s body and should close within the gap formed between first and second candlesticks.

Bullish upside Tasuki gap forms when buying pressure is more than selling pressure. The bearish candlestick of the third day is only a temporary halt of current trend; formed because some traders want to take profit from their positions. The partial filling of the gap denote that the sellers have not yet got control of the market.

Upside Tasuki gap is a moderately reliable pattern (but better reliable than downside Tasuki gap). Reliability increases with lesser trading volume on third day, with increase in gap, with decrease in real-body size and with similarity of second and third candlesticks, and with the lesser the gap is filled. Conformation of trend-continuation is strongly suggested, which can be a higher opening, a new gap or a bullish candlestick on forth day.

Thing to note: If the gap is filled completely by the third-day candlestick, then the pattern is considered very weak indicator of trend-continuation; and the chance of trend-reversal increases substantially.

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