This article may help to shed some light, actually its a very good piece of info
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A Two Bar Reversal (Bullish) indicates a possible reversal of the current downtrend to a new uptrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook. One and two-bar patterns reflect changes in investor psychology that have a very short-term influence on future prices - typically less than 10 bars. Often the immediate effect is trend reversal. For traders looking for clear entry and exit points, these patterns serve well. They are normally not suitable as signals for long-term investors unless viewed as monthly bars.
Description
A Two Bar Reversal is a classic signal of trend exhaustion. When these patterns occur after a pronounced advance or decline, the first bar should exhibit a dramatic continuation of the inbound trend, closing close to the bar's extreme end. The second bar completely negates the first bar, with the open price on the second bar being close to the close of the first bar and the close of the second bar being close to the open of the first bar. Wider trading ranges on both bars denote a more climactic reversal in psychology. Thats near perfectly describes LYC action.
Trading Considerations
Two Bar Reversals can be either Bullish or Bearish depending on the direction of the inbound price trend. If the inbound trend is up, then upon identification of a Two Bar Reversal, taking a short position or selling a long position is recommended. Conversely, if the inbound price trend is down, then upon identification of a Two Bar Reversal, taking a long position or closing a short position is recommended.
The degree that the price bars and volume characteristics match this description will likely have a bearing on the strength of the post pattern price movement. Good trading practice dictates that these signals should not be used in isolation: fundamental data, sector and market indications and other technicals such as support/resistance and momentum studies should be used to support your trading decisions.
Criteria that Supports
A persistent downward inbound trend is required; the longer and sharper, the better.
Both bars should have exceptionally wide trading ranges relative to the previous bars formed during the inbound trend.
For both bars, the opening and closing prices should be as close to the extreme points of the bars as possible.
Volume, if available, should be higher on both bars to accentuate the sentiment reversal. The greater the expansion of volume, the better the signal.
Underlying Behavior
Two Bar Reversals signal the dashing of hopes for those traders and investors that had been riding the trend or had jumped on board the especially wide trading of the pattern's first bar. The second bar, by completely reversing the ground made on the first bar, turns the tide of inbound sentiment and replaces it with an equal and opposite sentiment view. Look for an outbound trend period that reverses any gains made in the lead up to the Two Bar Reversal.
This article describes quite well the actions of this particular pattern, now if we think of it via our regular terms, (1) the first upbar was on Ultra High Volume, wide spread, which is always frowned upon as being highly suss and quite possibly full of their supply, and following these simple rules there's no skin off ones nose hey, cause no testing of that potential supply has been seen yet. When the next one appears, yippy, all aboard fire the rockets etc. Will be interesting to see what of Friday comes to. They appeared to have been buying the other Wednesday down abt 63cents, have they already offloaded that to the impatient, high risk traders of yesterday or do they still own them. That bar of yesterday was on very large volume and with todays action it appears likely a bit of a bash period is approaching, will be interesting to see if they do take it below the previous lows if its not a spring/in effect or simply a continuation of this persistant trend. It appears too close for comfort not to break those lows in attempting to squeeze some proper testing in, but in effect it would be a stronger 'spring/test' if it did dip into new low ground, cause really if you think about it, its not 'testing' for any supply if its not pressuring the stops of those traders, which would obviously be beneath the low.
Now after all that rabble, tomorrow will likely be up and away
btw, with LYSCF up heaps last night, can bet it will be belted tonight imo
LYC Price at posting:
66.5¢ Sentiment: None Disclosure: Held
(20min delay)