Breakaway (Bullish & Bearish)

A Bullish Breakaway is a five-candle bullish reversal pattern. It forms after a decline. A red candle closes below its open; a green one closes above it. Its body is the thick part between the open and the close.

It starts with a tall red candle. The next red candle opens below that candle's body, leaving a gap between the bodies: a band of prices between candle 1's close and candle 2's open. That candle and the two after it keep closing lower, a three-session drift. Then a tall green candle climbs back above the drift and closes inside the gap.

The mirror, a Bearish Breakaway, forms after a rally: a tall green candle, a green candle that gaps above its body, a drift of three higher closes, then a tall red candle that closes inside the gap. This guide teaches the bullish form first and the bearish one as its mirror.

Five sessions, three moods: a push, a drift, and a take-back.

Most gap patterns treat the gap as something to defend. In a Bullish Kicking, buyers make the gap, and a close back through it undoes their move. A Breakaway turns that around, and the reason is one question: who made the gap?

Here the sellers made it. The gap is the decline's last push: the session the market opened below the whole of candle 1's body. Filling a gap means price trades back through it, and that undoes the move that made it. In a Breakaway, the move it undoes is the decline.

What candle 5 does: it takes back the drift. Closing inside the gap puts it above candle 2's whole body, so above every close of the drift. Anyone who sold short (sold borrowed shares, betting on a fall) at those closes is now losing money.

What it leaves: the gap. By definition, candle 5 closes inside the gap and stops short of candle 1's close. Part of the decline's last push still stands. That is why candle 5 can never confirm a Breakaway on its own.

What closes it: a later close above candle 1's close, the top of the gap. Price has then closed back above every level between the two bodies, and the push that started the final leg down is undone.

The question carries to any chart with a gap. Before you read a fill as good or bad, ask who made the gap. A fill undoes the move that made the gap, so it counts against that move and for the side trading against it.

By name, a Bullish Breakaway is bullish and a Bearish Breakaway is bearish. The five candles alone do not settle it, though. Four of them extend the decline, and the fifth stops inside the gap.

The gap closing confirms it. A later close above candle 1's close means the decline's gap is filled, and many traders treat that close as the confirmation. It can come the next session or several sessions later.

It fails on a close below the pattern's low, normally candle 4's low. That close means the take-back was only a bounce and the decline has resumed.

A breakaway gap is a different thing with the same word. In chart-pattern terms, a breakaway gap is a gap that breaks price out of a trading range (a sideways stretch where price moves between a ceiling and a floor) and starts a new move. It is a single gap, read in the direction it points. The Breakaway candlestick pattern is a five-candle reversal, and its gap points the other way: it belongs to the trend that is ending. Search results mix the two up, so check which one a source means.

A Ladder Bottom has no gap to close. It is also five candles at the end of a decline, but its clue is the first long upper shadow in the run, and its fifth candle can confirm it alone. Read the Ladder Bottom guide →

A Morning Star is a shorter version of the story. A tall red candle, one small candle where the selling stalls, then a tall green candle. A Breakaway stretches the stall into three sessions that keep drifting lower, and its fifth candle stops short of candle 1's body, in the gap. Read the Morning Star guide →

The two are mirrors: every rule flips.

In a Bearish Breakaway, the buyers made the gap: candle 2 opened above the whole of candle 1's body. It and the next two close higher on smaller bodies, then a tall red candle falls below every close of the drift and closes inside the gap. A later close below candle 1's close fills the rally's gap and confirms it. A close above the pattern's high, normally candle 4's high, means it failed.

The pattern says a decline gapped, drifted and gave the drift back. Context says whether that happened somewhere that matters.

Moving averages. A Breakaway that turns up near a rising 50-day moving average reads as the end of a pullback inside an uptrend. Under a falling one, it reads as a bounce inside a downtrend. Read the Candlesticks + Moving Averages guide →

Fibonacci levels. A drift that ends on a common Fibonacci retracement (a level marking how much of the last rally has been given back) stalled at a price many traders had marked in advance. Read the Candlesticks + Fibonacci guide →

Volume. Heavy volume on candle 5, or on the close that fills the gap, means many shares changed hands as the drift was taken back. Lighter volume through the drift fits the story of sellers running out of force. Read the Candlesticks + Volume guide →

Volatility. The stop sits below the whole five-candle pattern and the entry waits for a close above the gap's top, so the distance is often several normal days wide. Measuring a normal day's range tells you whether the trade fits your risk before you take it. Read the Candlesticks + ATR guide →

A Breakaway teaches you to ask who made a gap. In the bullish form the decline made it, three smaller sessions drifted on, and one green candle took the drift back. The gap above is the part of the decline still standing.

Mark the gap, wait for a close above candle 1's close, put the stop below the pattern's low, and size from that distance. The same question about who made a gap will help on every chart you read.