Overview
Bearish Upside Gap Two Crows
Uwa Banare Niwa Garasu
Also known as: Gap Two Crows, Two Crows in Gap, Upside Gap Crows
The upside gap two crows features a long bullish candle followed by two bearish candles that gap above it. Crucially, the gap between the first candle and the crows remains unfilled, creating an 'island' of bearish candles. The third candle engulfs the second, confirming the reversal.
The upside gap two crows is a specific and rare variation of the two crows pattern. The key difference is that the gap between the first bullish candle and the two bearish crows must remain unfilled throughout the pattern. This creates two dark candles 'floating' above the bullish candle with a gap below them—like two crows perched on a high branch with empty space beneath. The third candle opens above the second candle's open but closes below the second candle's close (engulfing it), showing that selling pressure is intensifying. The unfilled gap is critical because it creates an 'island' that will eventually need to fill, and when it does, the resulting decline through the gap accelerates the reversal. This pattern is rarer but more reliable than the standard two crows because the maintained gap adds structural significance.
History & Etymology
The upside gap two crows is from classical Japanese candlestick analysis. The Japanese name 'uwa banare niwa garasu' roughly translates to 'two crows with an upside gap.' It is considered a more powerful version of the standard two crows due to the gap component.
'Upside gap' refers to the maintained gap above the first bullish candle. 'Two crows' are the two bearish candles perched above the gap. The image is of two dark birds sitting on a high branch—ominous and temporary.
How It Forms
Formation Steps
- 1First candle is a long bullish candle continuing the uptrend
- 2Second candle gaps up but closes bearish, above the first candle (gap maintained)
- 3Third candle opens above the second candle but closes below it, engulfing it, while still maintaining the gap above the first candle
Prerequisites
- Established uptrend
- The gap between the first and second candle must remain unfilled
Confirmation Signals
- Fourth candle gaps down through the remaining gap, filling it
- Volume increases on the third candle
- RSI turns down from overbought
Invalidation Signals
- Price breaks above the second candle's high
- The gap fills upward rather than downward
- Strong bullish continuation after the pattern
Candle Breakdown
Bullish Base
A long bullish candle confirming the uptrend and setting the gap base.
The last strong expression of bullish momentum before the crows appear.
First Crow
Gaps above the first candle but closes bearish. The gap between it and the first candle remains open.
Despite gapping higher, the session closes bearish. The maintained gap shows that price has 'left behind' the bullish base.
Second Crow (Engulfing)
Opens above the first crow but engulfs it by closing below it. Still maintains the gap above the first candle.
Selling intensifies. The engulfment of the first crow shows escalating bearish pressure, and the still-unfilled gap below is ominous.
Psychology
The two crows floating above an unfilled gap represent an unsustainable condition. The market gapped higher but could not hold the advance even briefly. When the gap eventually fills, the reversal accelerates.
Buyer Perspective
Buyers initially feel validated by the gap higher but grow concerned as two consecutive sessions close bearish despite the gaps up.
Seller Perspective
Sellers recognize the island formation as a classic trap. The two bearish candles above the gap confirm that the gap was exhaustion, not continuation.
Smart Money Action
Smart money sells into the gap-up euphoria, creating the bearish candles above the gap. They know the gap will eventually fill.
Retail Trader Trap
Retail traders buy the gap up expecting continuation, becoming trapped as the crows form and the eventual gap fill triggers stop losses.
Emotional Cycle
Trading Strategy
Aggressive Entry
Enter short at the close of the third candle.
Conservative Entry
Wait for the gap to begin filling (price dropping below the crows into the gap zone).
Full gap fill (the first candle's close level)
The first candle's open level
Measured move equal to the gap plus the crows' range
Best Conditions
- Timeframe: 1D
- Timeframe: 4h
- After rallies with gaps
- Earnings season
- Asset: Stocks
- Asset: Indices
Avoid When
- Timeframe: 1m
- Timeframe: 5m
- Low-gap markets
- 24/7 markets
Confluence Factors
- Gap at resistance level
- RSI overbought
- Volume increasing on crows
- Bearish divergence
- Fibonacci extension at the gap level
Scale In Strategy
Enter on the third candle, add as the gap fills.
Scale Out Strategy
Take 50% at the gap fill, trail rest.
Risk Management
Volume Analysis
Volume Confirmation
Increasing volume from the second to the third candle confirms escalating selling.
Volume Profile
Volume on the third candle should be the highest of the three.
Volume Divergence
Low volume on both crows reduces the pattern's significance.
Technical Confluence
Support Resistance
The crows' highs become resistance. The gap zone becomes a key level—when it fills, the decline accelerates.
Fibonacci Levels
The gap often occurs at a Fibonacci extension level of the prior trend.
Moving Averages
The crows gapping above a rising moving average is particularly significant.
Rsi Confirmation
RSI above 70 at the crows' formation confirms the overbought condition.
Macd Confirmation
MACD divergence at the crows adds momentum confirmation.
Bollinger Bands
Crows above the upper Bollinger Band confirm overextension.
Vwap
Crows above VWAP with the gap fill bringing price below it.
Ichimoku Cloud
Crows above the cloud with a gap back through it is a powerful Ichimoku signal.
Elliott Wave
May mark the termination of an extended fifth wave.
Wyckoff Phase
Can represent the BC or UTAD in Wyckoff distribution.
Market Profile
The crows form above the value area, and the gap fill rotates price back inside.
Order Flow
Net selling on both crows with accelerating negative delta on the third candle.
Open Interest
Rising open interest at the gap level suggests institutional positioning for the decline.
Multi-Timeframe Analysis
Higher Timeframe Alignment
Daily pattern at weekly resistance.
Lower Timeframe Entry
4H chart to time the gap fill entry.
Timeframe Confluence
Daily pattern in weekly overbought conditions.
Top-Down Approach
Weekly overbought > Daily upside gap two crows > 4H gap fill entry.
Statistics
Historical Examples
Amazon Upside Gap Two Crows
successAmazon gapped up on strong earnings but formed two consecutive bearish candles above the gap. When the gap filled, the stock declined 20% over the next month.
Lesson: Post-earnings upside gap two crows are powerful reversal signals, especially when the broader market is weakening.
Variations
Wide Gap Two Crows
The gap between the first candle and the crows is unusually large.
Confusion Matrix
Patterns commonly confused with Bearish Upside Gap Two Crows and how to distinguish them.
Bearish Two Crows
8500% similarCheck if a gap persists between the first candle and the crows. If yes, it is the upside gap variant. If the crows close into the first candle, it is the standard two crows.
Key Differences
- Upside gap two crows maintains the gap below the crows
- Standard two crows may have the third candle close into the first candle
- The maintained gap makes the upside gap version more significant
The bearish island reversal is a powerful reversal pattern where price gaps up, trades briefly in an isolated range (the island), then gaps down, leaving the island completely separated by gaps on both sides. It signals a decisive sentiment shift.
The two crows pattern features a long bullish candle followed by two bearish candles that gap above it. The second crow engulfs the first and closes into or below the bullish candle's body, signaling that the uptrend is failing despite the initial gaps higher.
The Bearish Abandoned Baby is one of the rarest and most reliable top reversal patterns in candlestick analysis. It features a doji that is completely isolated by gaps on both sides, signaling an abrupt and dramatic shift from buying to selling pressure.
The Bearish Advance Block shows three consecutive bullish candles with progressively smaller bodies and longer upper shadows, signaling that buying momentum is weakening and a reversal or consolidation is likely.
The Deliberation pattern shows two strong bullish candles followed by a small-bodied third candle, indicating that the uptrend is 'deliberating' — the bulls have stalled and are uncertain about pushing higher.
The Downside Tasuki Gap is a bearish continuation pattern in a downtrend where a gap-down is partially but not completely filled by a bullish candle, suggesting that the downtrend will continue as the gap acts as resistance.
Pro Tips & Common Mistakes
Pro Tips
- The gap between the first candle and the crows is THE critical feature—without it, the pattern is just standard two crows.
- Watch for the gap fill—this is often where the decline accelerates most dramatically.
- The pattern is most common after earnings gaps in individual stocks.
- Due to its rarity, always combine with other bearish signals for confirmation.
- The longer the gap remains open, the more significant the eventual fill.
Common Mistakes
- Confusing with standard two crows that do not maintain the gap
- Trading in markets without regular gaps
- Not targeting the gap fill as the first profit level
Advanced Techniques
- Track the exact gap boundaries: the first candle's high and the second candle's low define the gap zone.
- Use options strategies: the maintained gap creates a clear price zone for strike selection.
Institutional Perspective
The upside gap two crows often form after earnings announcements where institutional investors sell into the post-earnings euphoria. The maintained gap represents a price zone that will fill when institutional distribution is complete.
Fun Facts
- The upside gap two crows is one of the rarest three-candle patterns, appearing perhaps once or twice per year in any given market.
- The 'floating' crows above the gap create one of the most visually striking patterns in candlestick analysis.
Frequently Asked Questions
A three-candle reversal: a bullish candle followed by two bearish candles that gap above it, with the gap remaining unfilled. The second crow engulfs the first. The maintained gap and escalating bearish pressure signal a strong reversal.
The key difference is the maintained gap. In the upside gap version, the gap between the first candle and the crows remains open. In standard two crows, the third candle may close into the first candle's body.