CDLCOUNTERATTACK (CDLCOUNTERATTACK)

CDLCOUNTERATTACK (Counterattack) is a two-candle reversal pattern showing opposing forces at equilibrium. For bullish Counterattack: First candle is a long bearish candle continuing a downtrend. Second candle opens significantly lower (gap down) but then rallies strongly to close at or very near the previous candle's close - the 'counterattack' by bulls bringing price back to previous levels despite the weak opening. For bearish Counterattack: First candle is bullish in an uptrend, second gaps up but sells off to close near the first candle's close. The pattern shows that despite initial continuation (the gap), the opposing side counterattacked strongly enough to negate the day's move, creating equilibrium and potential reversal.

Counterattack patterns show momentum shifts and equilibrium battles that often precede reversals. The gap in the direction of the trend followed by a complete reversal back to the previous close demonstrates strong opposition forming. For bullish setups, the pattern shows bulls successfully defending a level despite initial weakness, suggesting a bottom is forming. Enter long positions when the next candle confirms by closing above the counterattack candle's high. For bearish setups, short when the next candle breaks below the pattern. The pattern is moderately reliable and works best at significant support/resistance levels where failed breakouts are common. Combine with RSI showing extremes reversing, support/resistance zone confirmations, and increased volume on the counterattack candle. Popular in crypto for identifying failed dump/pump attempts at key levels.