Upside Tasuki Gap

An Upside Tasuki Gap is a three-candle bullish candlestick pattern that signals continuation of an existing uptrend. It consists of a gap higher between the first and second candles, followed by a third candle that partially fills but does not close that gap — indicating a temporary pullback rather than a reversal.

Key takeaways

• Three-bar pattern that signals uptrend continuation.
• The second candle gaps up above the first; the third candle closes part of that gap but fails to close it completely.
• The bears’ inability to fully close the gap suggests the bulls remain in control.
• Often used with other technical tools (volume, trendlines, other gap types) for confirmation.

Structure of the pattern

1. First candle: a strong bullish (white/green) candlestick inside a defined uptrend.
2. Second candle: another bullish candlestick that opens above the first candle’s close (a gap up).
3. Third candle: a bearish (black/red) candlestick that moves down into the gap but does not close it completely.

The key characteristic is that the third candle’s decline stops within the gap area — the gap remains unfilled. That unresolved gap indicates buying pressure still outweighs selling pressure, so the uptrend is likely to resume.

Why it matters

The pattern illustrates market psychology:
* The gap up (second candle) shows strong bullish momentum or positive news.
* The third candle represents profit-taking or a short-term reaction by bears.
* Failure to close the gap demonstrates that sellers lack conviction, increasing the probability that buyers will push prices higher again.

The Upside Tasuki Gap is a bullish counterpart to the Downward Tasuki Gap, and both have origins in Japanese candlestick analysis. It commonly appears within ongoing bullish structures such as ascending channels and can occur after breakaway or runaway gaps in a trending move.

How traders use it

Common approaches to trade the Upside Tasuki Gap:

Entry options
* Enter at the close of the third (bearish) candle to capture the resumption of the uptrend.
* Use a buy-stop slightly above the high of the second (gap) candle to confirm momentum has resumed.

Stop placement
* Conservative: place a stop below the low of the first candle (the gap’s lower boundary).
* Aggressive: place a stop below the low of the third candle.

Confirmation
* Look for above-average volume on the gap or subsequent bullish candles.
* Combine with trendlines, support/resistance, or other gap patterns for higher-probability trades.

Example

A trader spots an Upside Tasuki Gap on a chart. Possible trade setups:
* Enter at the close of the third candle at $62.97 with a stop under the first candle’s low at $62.08.
* Or place a buy-stop above the second candle’s high at $63.39 and set a stop beneath the third candle’s low at $62.93 to confirm the uptrend has resumed.

Limitations and tips

• Like all patterns, the Upside Tasuki Gap is probabilistic — not guaranteed. Use risk management and position sizing.
• Watch volume: weak volume on the gap or on follow-through can reduce the pattern’s reliability.
• Be wary near major resistance levels or when broader market conditions are deteriorating.

Conclusion

The Upside Tasuki Gap is a simple, clear pattern that highlights a temporary pullback inside a bullish gap. When used with confirmation (volume, trend context, or other technical tools) and disciplined risk controls, it can help traders identify high-probability continuation trades.