The Upside Gap Two Crows candlestick pattern is a rare candlestick pattern that is similar to the Evening Star candlestick pattern and the Engulfing candelstick pattern, but with a few significant differences. Like the Evening Star pattern, the Upside Gap Two Crows pattern is a bearish top reversal pattern that consists of three candlesticks.
The first candlestick in the pattern must be a bullish candlestick with a large real body and must be light in color. This bullish candlestick is followed by two smaller bearish candlesticks that almost form an Engulfing pattern, except that they are both bearish and hence dark in color. The first bearish candlestick that follows the bullish candlestick must have an upside gap between its real body and the real body of the bullish candlestick, as is the case with the Evening Star pattern. However, the last candlestick in the pattern must open above the real body of the middle candlestick and must close below it to completely engulf the real body of the second candlestick. Where the upside-gap two crows pattern differs from the Evening Star pattern is in the last candlestick, which need not penetrate and close well into the real body of the first candlestick.
As the upside-gap two crows pattern is a bearish trend reversal pattern, it is only valid if it appears in an uptrend. As with most trend reversal patterns, the upside-gap two crows pattern is more significant when it appears on or near a resistance area near the top of an existing trend line.