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Trading the Mat Hold Candlestick Pattern

Mat Hold
(uwa banare sante oshi)

Description

Similar to the 'Rising Three Method', it has the look of an Upside Gap Two Crows except that the second black body (third day) dips into the body of the large white candle. It is followed by another small black body that dips a bit further into the white candle body. The final day gaps to the upside. It continues its upward move to close higher than the trading range of any of the previous days.

The implication is that the trend has not been stalled. This is a good point to add to positions. The Mat Hold pattern is a stronger continuation pattern than the Rising Three Method. During the days of 'rest,' unlike the Rising Three Method, the price stays close to the top of the white candle's upper range.

Criteria

  1. An uptrend is in progress. A long white candle forms
  2. A gap up day that closes lower than its open creates a small black candle
  3. The next two days form small candles somewhat like the Rising Three Method.
  4. The final day gaps up and closes above the trading ranges of the previous four days.

Pattern Psychology

The Mat Hold pattern does not pull back as much as the Rising Three Method. It is easier to identify. The pull-back days are less concerning. The relatively flat rest period does not create the concern that the Rising Three Method does. After three days of the bears not being able to knock the price down to any great degree, the bulls step back in with confidence.

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