The Tasuki Candlestick Pattern
The Tasuki candlestick pattern is a continuation pattern that consists of two candlesticks and a window. It starts with a gap or window at the open of the first candlestick that forms support or resistance. In Japanese candlestick charting, a gap is called a window and occurs when there is a visible gap between two consecutive candlesticks, including their shadows. It is not a window if the gap is only between the real bodies of the two candlesticks, but the shadows or wicks overlap. The gap must be between the shadows as well. A window can be a rising window, which is bullish, or a falling window, which is bearish. The two candlesticks immediately after the window form the pattern. These two candlesticks should not close the window or fill the gap.
Tasuki with Rising Window
A Tasuki with Rising Window, or Tasuki upside gap as it is also called, can occur in an uptrend. The market is in a clearly-defined uptrend when a rising window forms. The candlestick whose open forms the rising window should be a bullish candlestick that closes higher and is light in color. This candlestick is followed by a dark, bearish candlestick that open within the real body of the preceding candlestick. This bearish candlestick should close below the real body of the first candlestick but should not close the window. If the second candlestick closes the window, then the pattern is invalid. Subsequent candlesticks may close the window but not the second candlestick. The rising window is considered as support zone and the failure of the market to close the window and violate support, is an indication of the continued bullish nature of the market.
Tasuki with Falling Window
The opposite is true of a Tasuki with a Falling Window or Tasuki downside gap as it is also called. The candlestick following the falling window should be a dark, bearish candlestick that is succeeded by a bullish rising candlestick that open within the real body of bearish candlestick. The second candlestick should close above the real body of the first candlestick without closing the window. The falling window is an indication of bearish sentiment with the window serving as resistance. This bearishness is confirmed by the failure of the following two session to close the window and violate resistance.