Bullish Island Reversal Formation
Description
A Bullish Island Reversal candlestick formation is composed of a minimum of 3 candlesticks. The first is a red down day candle, which occurs during a down move. The second candle creates a window, or gap, after printing. That is, the high of the second candle is lower than the low of the first candle. The third day is then usually a green candle, whose low is also above the high of the second day. That leaves the second day on it's own little "island" below the 2 prints on either side, surrounded by open chart space. This is a bullish island reversal in its simplest form.
The island can be formed by a single candlestick, or it can be formed by multiple candlesticks. Remember above, we mentioned that an island is composed of a MIMIMUM of 3 candles. There can be many more candles that make up the island. What creates the bullish island reversal pattern is the gap down from the first candle, and the gap up to the last candle.