The Separating Lines Candlestick Pattern

SEPARATING LINES
(iki chigai sen)

Description

Iki chigai sen is defined as ‘lines that move in opposite directions.’ The market is in an uptrend when there is a pullback, exhibited by a long black candle. However, the next day opens back up at the same level as it open the prior day. The Separating Lines Candlestick Pattern has the same open and is the opposite color. This is the exact reverse of the Meeting Line Pattern. In other Japanese circles, this is also known as Furiwake or Dividing Lines.

Criteria

1. An uptrend is in progress.Then a day occurs that is the opposite color of the current trend.
2. The second day opens at the open of the previous day.
3. The second day, should open on its low for the day and proceed to go higher

Pattern Psychology

During the uptrend, a black body occurs. This causes some concern to the Bulls. But the next day the prices gap back up to the previous day’s open. This gives the bulls confidence that the trend still has life in it. They jump back in and move prices higher. Confidence is renewed and the trend continues. The bearish Separating Line works the exact same way in the opposite direction.

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