Updated on March 9, 2023
The Breakaway pattern is a bearish reversal pattern that is formed when the market is in an uptrend. It is characterized by a period of consolidation or a period of sideways movement, which is followed by a gap lower and a downward move. The pattern is formed when the bulls take control of the market, but then lose momentum, and the bears take over, pushing the prices lower.
How to use Breakaway Pattern Bearish Reversal Pattern?
The Breakaway pattern is considered a bearish reversal pattern because it is typically formed when the market is in an uptrend and the bears take control of the market, reversing the direction of the trend. Traders may use this pattern to identify potential short-selling opportunities.
Breakaway pattern is a relatively rare pattern and it is typically seen in markets that are experiencing significant bearish pressure. Additionally, it should be confirmed with other technical analysis tools, such as trendlines and indicators, before making a trading decision.