The Advance Block is a bearish reversal pattern charted as three consecutively bullish candlesticks with consecutively higher closes in an uptrend. Indicating the end of the current uptrend, the Advance Block is a trend reversal or top reversal pattern.
Theoretically a bearish reversal pattern but in practice frequently is a bullish continuation pattern, the Advance Block is a three-candle pattern whereby:
The market is in an uptrend.
The first candlestick in this pattern is a large bullish candle.
The second candle is another bullish candle–with a smaller body– that opens within the body of the first candle but continues to move up to make a slightly higher close.
The third and final candle should open at or near the close of the second candle and move up to make a higher close. Each subsequent candle body with the Advance Block pattern should be smaller than the preceding candle.
A fourth day bearish candle where price overcomes the midpoint of the first day’s candle or a large gap down along with high trading volume is used as a confirmation of the reversal pattern.