The Stick Sandwich candlestick pattern is a three candle pattern formation that in theory acts as a bullish reversal pattern. Even though it’s considered a bullish reversal pattern, Bulkowski’s testing shows that it acts as a bearish continuation pattern 62% of the time.
You should look at this pattern as bullish or bearish based on the preceding candles.
The first candle is a regular sized bearish candle.
The second candle is a regular sized bullish candle that opens within the body of the first candle and forms a higher close.
The third and final candlestick is another bearish candle that closes at or near the close of the first candle.
You can find this candlestick pattern pretty easily on most charts, and because of the chances of this pattern breakout out are strong, this a candlestick formation worth remembering.
Because it can break out in either direction and is theoretically a bullish reversal pattern, be biased to the upside before you consider shorting.