The Stalled candlestick pattern, which is also referred to as the deliberation candlestick pattern, is another moderate trend reversal pattern that is similar to the Advance Block and the Three Advancing White Soldiers pattern. These three candlestick patterns are moderate patterns that indicate a weakening of the existing trend rather than on outright reversal of that trend. Like the Advance Block pattern, the Stalled pattern must appear in an established uptrend where it usually indicates a weakening of the existing trend, and the possible emergence of a bearish downtrend.
However, as this is a moderate pattern, it should not be used to enter a short position but it serves to warn that you should be ready to exit your long position. After the Stalled pattern has completed, a subsequent move of the price chart below the middle of the second candlestick’s real body, a bearish reversal becomes more likely and traders could consider closing their long positions and wait for bearish pattern, such as the Hanging Man or the Evening Star pattern before taking a short position.
The Stalled pattern is similar in appearance to the Advance Block pattern as it also consists of three bullish candlesticks that are light in color, with each successive candlestick in this pattern making a higher high and a higher low, and each successive candlestick having a shorter real body than the preceding candlestick in the pattern. THe difference between the Stalled pattern and the Advance Block lies in the shadow or wicks. In the Stalled pattern, the first two candlesticks must have shortish shadows and the last candlestick must have a relatively long upper shadow. The shorter real bodies indicate an increasing weakness in an uptrend as successive candlesticks fail to advance the price to the same extent as the previous candlestick. The longer upper shadow on the last candlestick indicates that the market retreated much more than before, showing even greater weakness in the uptrend. This warns of a potential end to a rally, however, as this is a moderate pattern, it does not necessarily indicate the emergence of a downtrend. Therefore this pattern should be used to protect a long position rather than entering a short position. The appearance of a bearish candlestick pattern, which would signal the start of a possible downtrend, should be used to enter a short position.