Stick SandwichBack to Glossary
A Stick Sandwich is a rare but useful candlestick formation that generates reliable reversal signals. Once identified, it can be used to signal either bullish or bearish reversals in a market. In a bullish scenario, first you have a long downward candle at the bottom of an established downtrend, this is followed by a smaller up-candle that gaps-up and closes above the opening price of the first candle. Finally, you have a long down-candle that closes at the same price as the first candle and engulfs all three. It’s essentially a double-bottom with a gap-up green candle squished in the middle. It tells you that bearish momentum is running out and bullish momentum is gaining. The bearish scenario works the opposite way. You start with a long up-candle at the top of an established uptrend, this then gives way to a down-candle that gaps down from the close of the first candle, closing below it. Finally, a long up-candle engulfs the previous two but fails to break above the first candle’s close. Again, essentially a double top indicating strong resistance, only with a red gap-down candle squashed in the middle like your favorite sandwich filling.
Found the definition you’re looking for?
If you feel we’ve missed a term; let the Traders Expert team know and we’ll include it in our Glossary.