Candlestick patterns on stocks — and the honest news that bearish ones underperform.
One POST /v1/brief with a stock or ETF ticker detects the candlestick signals — bullish & bearish engulfing, hammer, doji — each with a geometric confidence and a backtested base rate + 95% CI from a US-equities corpus. And the corpus says something most candlestick guides won't: on stocks, a clean bearish pattern resolves its way less than half the time — because equities drift up. We put that number in the payload.
One bearish candle, two bullish. The drift shows up in the base rate.
Three textbook candlestick signals, all a clean geometric fit. Here is how often each actually resolved its own way over the next 10 bars on US stocks & ETFs.
distance from it = the honest edge
Directional hit rate over the next 10 bars, 95% CI, no lookahead, on a US-stocks/ETF corpus — the same evidence block your model receives. The bearish engulfing resolved down just 41.3% of the time: the stock actually rose 58.6% of the time after it. Bullish engulfing and hammer sit the mirror distance above 50. That asymmetry is the upward drift of equities, measured — and reported, not hidden.
One POST /v1/brief (or the MCP tool patternfetch_brief) with { ticker, timeframe } returns detected candlestick patterns on stocks & ETFs — bullish_engulfing, bearish_engulfing, hammer, doji — in analysis.patterns, alongside the multi-bar chart patterns. Each directional pattern carries a geometric confidence (0..1), the candle index at, a span, and an evidence block with the backtested base rate + 95% CI on a US-equities corpus. doji is directionless, so it ships a shape score but no base rate.
On equities, bearish candles fight the drift.
Candlestick lore treats a bearish engulfing as a reversal-down signal. On US equities, the honest base rate says otherwise: the stock is more likely to be up 10 bars later than down, whatever the candle did — because equities have a structural upward drift. So a bearish signal lands below a coin flip, and a bullish one lands a little above.
- Equities drift up over the long run, so any 10-bar window has a slight upward prior.
- A bearish candle only "hits" if price falls — it's betting against the prior, so its rate sits below 50.
- A bullish candle "hits" if price rises — it rides the prior, so its rate sits above 50.
- The gap between them is the drift, quantified. patternfetch reports it instead of laundering it.
# typical candlestick API
{ "pattern": "bearish_engulfing",
"signal": "SELL" } ← confident, blind
# patternfetch
{ "name": "bearish_engulfing",
"evidence": { "hitRate": 0.413,
"ci95": 0.009, "n": 12799 } }
← the signal resolved its way 41% of the timeRequest in, candlesticks + base rate out.
A real /v1/brief shape for Apple on the daily. Note the two figures in evidence: hitRate (went the pattern's way) and dist.winRate (actually closed up).
POST https://patternfetch.com/v1/brief
Authorization: Bearer pf_…
Content-Type: application/json
{ "ticker": "AAPL",
"timeframe": "1d" }{ "name": "bearish_engulfing",
"confidence": 1, "at": 118, "span": 2,
"evidence": {
"scope": "US stocks & ETFs",
"tf": "1d", "band": "0.75-1.00",
"horizon": 10, "n": 12799,
"hitRate": 0.413, "ci95": 0.009,
"dist": { "winRate": 0.586, "median": 0.008 }
} }A picture-perfect bearish engulfing (shape 1.00) that historically resolved bearish only 41.3% of the time (±0.9%, n=12,799) — and where the stock actually rose 58.6% of the time (dist.winRate) over the next 10 bars. Below a coin flip: the bearish "signal" fades as equities drift up. The same call also returns chart patterns, support/resistance levels, regime, interpreted indicators and a one-line nl summary. See it live →
Every stock candlestick, with the real number.
Daily, high-confidence base rates for the candlestick set on US stocks & ETFs. Bullish patterns carry a slim edge; the bearish pattern sits below a coin flip; doji is directionless and ships no base rate.
| Candlestick | Direction | Base rate (10-bar) | 95% CI | Sample | Read |
|---|---|---|---|---|---|
| bullish_engulfing | bullish | 57.9% | ±0.9% | 11,539 | slight edge |
| hammer | bullish | 57.7% | ±1.3% | 5,597 | slight edge |
| bearish_engulfing | bearish | 41.3% | ±0.9% | 12,799 | below 50 |
| doji | neutral | — | — | — | directionless |
US stocks & ETFs · timeframe 1d · confidence band 0.75–1.00 · horizon 10 bars · gross-directional, no lookahead. Base rates vary by timeframe and band — on shorter intraday timeframes the drift is weaker and every bucket clusters nearer 50. The live number is whatever the corpus says at call time. Methodology →
On crypto pairs, the same engulfing patterns sit near a coin flip in both directions (bullish ~48%, bearish ~49% at 4h) — there's no equities-style drift to push them apart. patternfetch routes stocks to a US-equities corpus and crypto to a crypto-pairs corpus automatically, because a base rate borrowed across asset classes would be a lie. Compare on the crypto candlestick API.
Free to start. MCP-native for agents.
Streamable HTTP at /mcp — discovery is free, a tools/call is billed like REST. Five tools, one schema across stocks, ETFs and crypto.
# one line — OAuth mints a free key,
# nothing to paste
claude mcp add --transport http \
patternfetch https://patternfetch.com/mcp
# or Bearer in a config file
{ "mcpServers": { "patternfetch": {
"url": "https://patternfetch.com/mcp" } } }① No-signup demo — POST /v1/demo returns a real brief with patterns and evidence, no key. ② Free key with $0.05 starter credit (~5 briefs) from one call, no card. A brief is $0.01. Pay with x402 (USDC on Base, no account) or Stripe. Credits never expire. Pricing →
Questions.
Which candlestick patterns does it detect on stocks?
bullish_engulfing, bearish_engulfing, hammer and doji. The same response also returns multi-bar chart patterns (double_top, double_bottom, head_and_shoulders) in analysis.patterns. Directional patterns carry an evidence base rate; doji is directionless and ships a shape score only. See the chart pattern API for the multi-bar formations.Why do bearish stock candlesticks underperform?
How is the base rate different from confidence?
confidence is a geometric shape score (0..1) — how cleanly the candle geometry matches the textbook body/wick ratios. The base rate (evidence.hitRate) is separate: how often that pattern, timeframe and confidence band historically resolved its way over the next 10 bars, with a 95% CI and sample size, no lookahead, on a US-equities corpus.Which timeframes and tickers are supported?
AAPL, SPY, MSFT, QQQ) plus crypto spot pairs (e.g. BTC/USDT). Timeframes 1m, 5m, 15m, 30m, 1h, 4h, 1d, 1w. Pass ticker and timeframe to POST /v1/brief.