A kicker pattern is similar to a gap pattern, but a bit different. They are either bullish or bearish and signify a reversal. Bullish kickers begin with a bearish candle, followed by a bullish gap up. Bearish kickers begin with a bullish candle, followed by a bearish gap down. Kicker patterns are reversal patterns used to signal a change in a stock’s price direction. It is a popular pattern that traders like to trade. Bullish kicker patterns, as well as bearish kicker patterns, are the most reliable reversal patterns.
What Is a Kicker Pattern?
The bullish kicker has the look of gap-up patterns. Conversely, the bearish kicker looks like a gap-down pattern. The kicker pattern is a reversal pattern, which is why it differs from a gap pattern when trading stocks. Gap patterns tend to persist in a trend, either up or down, and remain in that direction. They may look similar, but they each do something different.
There are two candlestick patterns. The kicker pattern is characterized by a sharp reversal in price over two candlesticks. Traders can then determine who’s in control of the direction the stock will be heading.
In other words, the first candlestick should be in the direction of the trend, followed by a gap. The second candlestick forms in a new direction, either above or below the gap. Watch how to trade kicker patterns here.
Kicker Pattern Trading Strategy
How to trade kicker patterns:
- Watch for a bullish or bearish pattern to form.
- If bullish, take a long when the price breaks above the gap-up candle.
- Place a stop below the gap candlestick.
- If bearish, take a short position when the price falls below the gap-down candle.
- Place a stop above the gap candlestick.
Technical Analysis
A kicker pattern alerts you to a significant shift in traders’ attitudes toward a stock. The release of news or information is typically the catalyst for a change in traders’ attitudes.
There are two kinds of kicker patterns: bullish kickers and bearish kickers.
The gaps form key support, resistance levels, and moving average lines. In every chart posted in this article, you’ll notice that the price moves away from the moving averages.
Moving averages, such as the simple moving average, provide equilibrium to a stock. No matter how far away the price moves, it will return to those lines.
The gaps on the bullish and bearish kickers also get filled. When you draw your support and resistance lines, pay close attention to them.
All traders are very aware of these levels. The gaps are filled, and a new trend could begin, or the current trend could continue.
Kicker Pattern Examples
You can see a bullish kicker pattern on NFLX. It formed a double bottom, and the price began to reverse to the upside. There were bearish candlesticks followed by large bullish candlesticks forming the bullish kicker. As a result, some bull flag patterns formed. Note that the gap was filled before continuing upwards.
Bullish kicker patterns form when a stock is in a bearish price movement. You might think that bullish kickers would form in a bullish market and that forming while bearish is an oxymoron.
Hence, it’s considered a reversal pattern. The stock gaps are in the opposite direction of the trend, which is why it’s different from a gap-up pattern.
It is a two-candlestick pattern, so you should have a bearish candlestick followed by a bullish one. It’s important to remember that the candles never overlap.
Hence the gap. It’s also how you validate the pattern.
TWTR Kicker Pattern Example
TWTR experienced a downward price movement for approximately 2 months before forming a bullish reversal. You can see the bearish candle followed by a bullish candle. They did not overlap, confirming the validity of the pattern.
Bearish Kickers
Bearish kicker patterns are the opposite of bullish kickers. They form while the stock is in an uptrend. It informs you that the bull party is over.
The stock gaps are away from the bullish trend. The bears are now in control.
The two candlesticks are also reversed. A bearish candle follows a bullish candle. Again, there should be no overlapping of the two candles. It would be best to have the gap; otherwise, the pattern is null and void.
Bearish Kicker Pattern Example
The bearish kicker that formed on C moved far away from the moving average lines. It still had the bullish candle followed by the bearish candle. Price gravitated back to the moving average lines and traded inside the support and resistance made by the kicker gap. You can see long-legged doji candlesticks form at the resistance level. Doji candlesticks are indecision candles. Resistance became support and was tested again.
Kicker Pattern Failure
The phrase “all gaps must be filled” is something to be aware of with kicker patterns. Many times this is the case; however, it’s a matter of “when” this will happen. If you are bullish on a kicker pattern and the price gaps up, then you can take advantage of a bullish run-up. Just use the gap area as a stop. The inverse is true as well. Just be careful because price can also reverse quickly, not giving you enough time to take advantage of the run-up or down.
Final Thoughts: Kicker Patterns
Kicker patterns are two-candle reversal patterns. It’s essential to consider the other patterns they’re a part of. This can give you a clue about the upcoming move.
It’s essential to remember that nothing in the stock market is 100% perfect. Even the clearest patterns and the best setups can break down. If you study and practice before making live trades, you’ll set yourself up to be successful. Use proper risk management techniques when trading kicker patterns.
