Two relatively rare candlestick pattern formations that occur both in bull and bear markets are commonly referred to as bearish or bullish breakaway patterns. 

Their rarity is due to the necessity of five trading sessions and associated candlesticks.  Overall, these formations occur when the underlying long-term trend is beginning to lose its momentum. 

As a result, when they do appear, they are viewed by market participants as highly precise indicators of a reversal of price action in the market.

Bullish Breakaway Candlestick Pattern

The first day in this formation is a long candlestick reflecting the downward movement in price, which is confirming the established downward historical trend of price movement. 

The second, third, and fourth day candlesticks all demonstrate the same directional trend with lower closes, but the bodies of the candlesticks are clearly smaller and weaker in their formations. 

The fifth and final day of this formation is a long upwardly closing candlestick that surpasses the previous three-day closes, and the closing price is well into the original first day candlestick.

Initial candlesticks of this formation confirm the underlying long-term trend. 

The weakening of the lower closes by the third and fourth days, however, is interpreted by analysts to mean that the trend is losing momentum. 

Within this breakaway pattern can also be seen a Three Stars in the South formation, which in and of itself is a strong reversal signal.

The last candle in the bullish breakaway pattern is the confirmation that is needed to signal a reversal is about to occur. 

After several days of deteriorating prices, this clear bullish candle indicates a market change of direction. 

This candlestick must close significantly above the previous three days high for it to represent a true confirmation of trend reversal. 

It is important to have a minimum of three declining and weakening bearish closes for a true formation of a bullish breakaway pattern.

There are various variations of this pattern formation, and some traders prefer to see gaps after the first big bearish one day move.

Bearish Breakaway Candlestick Pattern

This pattern is in essence the opposite of a bullish breakaway candlestick pattern. 

The first day is a long upward candlestick that is followed on the second, third, and fourth days with smaller candlesticks formations in the same direction, each having higher closes than the previous day. 

These three consecutive upward movement days, however, are clearly weaker bodied candlesticks as compared to the first day of the pattern formation. 

The fifth and final day is a very long bodied negative candlestick that closes below the lowest price of the previous three days and well into the body of the first day’s candlestick.

The pattern starts off demonstrating continued upward movement in prices of the underlying long term trend. 

However, this momentum is demonstrated to be weakening by the third and fourth days through the formation of smaller candlesticks. 

Within this pattern is a clear bearish Advance Block formation, which also precedes trend reversals. 

This bearish formation, however, is generally viewed as a weak indicator, and it is not until the final fifth day candlestick that its usefulness as a trend reversal signal becomes confirmed. 

As with the bullish breakaway candlestick formation, many consider this formation to be a stronger indicator when gap price movements can be observed within.