The Bullish Abandoned Baby (or Abandoned Baby Bottom) is a candlestick pattern that signals a reversal in the current downtrend and indicates the beginning of an uptrend.
Considered an accurate reversal pattern, the Bullish Abandoned Baby is a three-candle chart pattern whereby:
The first candle is a large red candlestick located within a defined downtrend.
The second candle is a doji candle (open equal to the close) that gaps below the close of the first bar.
The third candle is a large white candle that opens above the second bar and is used to show the change in trader sentiment.
Signalling a rapid shift in momentum from the bears to the bulls in the market, a fourth day bullish candle is used as a confirmation of the reversal pattern. Bulkowski suggests the Bullish Abandoned Baby has a reversal accuracy of approx. 70-percent and the reliability of the pattern improves with an increase in gapping and trading volume.
Considered a rare find on a price chart, the accuracy of the reversal signal is greatly improved when it is used in conjunction with other technical indicators such as the MACD and RSI to confirm the reversal.