Kicker Candlestick Pattern: The Gap Reversal Traders Can’t Ignore

Picture a stock that has fallen for six sessions straight. Day seven closes red again, near its low. Then the company announces something big after hours, and the next morning the stock opens well above the previous day’s open and never looks back. Two candles, two completely different moods. That is the kicker candlestick pattern, and it is one of the few candle setups where the chart is basically shouting that the crowd has changed its mind overnight.

In this guide we’ll cover how to spot a kicker, how the bullish and bearish versions differ, how it is not the same thing as an ordinary gap, and how a trader might actually handle one with an entry, a stop and a target. The price examples are hypothetical, built with round numbers so the logic is easy to follow.

What is a kicker candlestick pattern?

Investopedia’s explainer on the kicker pattern describes it as a two-bar candlestick formation that signals a potential reversal, usually after the release of significant information. The first candle moves in the direction of the existing trend. The second candle opens at the same level as the first candle’s open, or gaps beyond it, and then runs hard the other way.

Because the second candle is a complete U-turn, the two bodies usually come out in opposite colours on most charting platforms. One green, one red, sitting side by side with no overlap between their bodies. It is a striking picture, and that’s part of why traders remember it.

There are two versions:

• Bullish kicker: a bearish (red) candle, followed by a bullish (green) candle that gaps up.
• Bearish kicker: a bullish (green) candle, followed by a bearish (red) candle that gaps down.

Investopedia notes that kicker patterns are rare, and that the pattern’s relevance goes up when it shows up in overbought or oversold conditions. Keep that second point in mind. A kicker in the middle of a sideways range means far less than one after a long, stretched move.

Why the kicker pattern works the way it does

Candlestick charts are older than most people think. The Wikipedia article on candlestick patterns credits much of the early work to Munehisa Homma (1724–1803), a rice merchant from Sakata, Japan, who traded in the Dojima rice market in Osaka. The same article also notes that Steve Nison, who popularised candlesticks in the West, believed candlestick charting itself came later, probably after 1850. Either way, the core idea has survived because candles show something a plain line chart hides: who won the session, buyers or sellers, and by how much.

A kicker compresses a full change of control into two sessions. On day one, the trend crowd is in charge and confident. Overnight, something shifts. It might be quarterly results far away from expectations, a big order win, a regulatory action, a block deal or a management change. By the next open, the people who were selling yesterday are scrambling to buy, or the other way round. There is no gradual handover. The open itself is the verdict.

A kicker isn’t the market slowly changing its mind. It is the market waking up with a different opinion and not waiting to explain itself.

That is also why the pattern tends to be tied to news. Investopedia points out that the kicker usually reflects a dramatic change in a company’s fundamentals or in how investors see them. On an Indian stock, that often means results season, a corporate announcement on the exchange, or a sector-wide policy surprise.

How to identify a bullish kicker

Walk through it as a checklist:

1. A prior downtrend. The stock should have been falling, ideally for a while. A reversal pattern needs something to reverse.
2. Candle one is bearish. A red body that continues the decline. On its own it means nothing new.
3. Candle two opens at or above candle one’s open. This is the key. Not just above yesterday’s close, which happens all the time, but at or above yesterday’s open. The whole of day one’s selling is wiped out before the bell rings.
4. Candle two closes strongly bullish. A solid green body that keeps moving in the new direction instead of fading back into the gap.

Worked example: a hypothetical bullish kicker

Say a mid-cap stock, call it Stock A, has slid from ₹600 to ₹500 over three weeks. Here is how the two sessions look:

• Day 1: opens at ₹510, falls to a low of ₹495, closes at ₹498. A red candle, nothing unusual in a downtrend.
• After market: the company reports results that beat what the street was expecting by a wide margin.
• Day 2: opens at ₹525, which is above Day 1’s open of ₹510. Low of the day is ₹522, the stock closes at ₹548 near its high.

Day 2’s entire body sits above Day 1’s entire body. Nobody who bought on Day 1 is sitting on a loss after the open. That is the bullish kicker.

How to identify a bearish kicker

Flip everything. According to Investopedia, the bearish version is more reliable when it forms after an uptrend or in an overbought area. Day one is a green candle that continues the rally. On day two, the stock opens at or below day one’s open and then falls further.

Worked example: a hypothetical bearish kicker

Stock B has rallied from ₹1,200 to ₹1,450 in a month and looks stretched.

• Day 1: opens at ₹1,430, highs at ₹1,462, closes at ₹1,455. Green, confident, another up day.
• Overnight: news breaks that a large client contract has been cancelled.
• Day 2: opens at ₹1,400, below Day 1’s open of ₹1,430. The high of the day is ₹1,408 and it closes at ₹1,362.

Every buyer from the previous session is underwater from the first tick. Trapped longs selling into the fall can add fuel. That’s the bearish kicker.

Kicker pattern vs a normal gap

This is where most beginners get confused. Indian stocks gap all the time: on global cues and on overnight news from abroad. A gap alone is not a kicker.

Investopedia makes the distinction clearly: a gap pattern tends to show a gap up or down and then stay in the same trend, while the kicker is a reversal. The difference is what happened on day one.

• A stock in an uptrend that gaps up again is a continuation gap. Same direction, more of the same.
• A stock in a downtrend that closes red and then opens above the red candle’s open is a kicker. Direction flipped.
• A stock that opens above yesterday’s close but below yesterday’s open is just a gap into the previous body. That is closer to territory covered by patterns like the piercing line or the engulfing pattern, not a kicker.

Gaps also behave differently afterwards. Some fill within days, others never do, and we’ve covered why in our guide on gap fill trading. With a genuine kicker, the whole point is that the gap is supposed to hold.

Trading the kicker candlestick pattern: entry, stop and target

Here is one sensible way to approach it. It isn’t the only way, and none of it removes risk.

Entry

Investopedia makes an interesting point here: traders who see a kicker often feel the price has run too far, too fast, and wait for a pullback, only to watch the move carry on without them. So there are two camps:

• Aggressive: enter near the close of the kicker candle, once it is clear the gap is holding and the body is strong.
• Patient: wait for the next session and enter only if price stays above the kicker candle’s low (bullish) or below its high (bearish).

In the Stock A example, an aggressive trader buys near ₹548. A patient one waits for Day 3 and buys only if the stock holds above ₹522.

Stop loss

The logical stop sits beyond the gap. For a bullish kicker, that’s below the second candle’s low, or a little more conservatively, below the first candle’s open. If price falls back into day one’s body, the story that justified the trade is broken.

For Stock A, a stop below ₹522 risks about ₹26 per share from a ₹548 entry. A wider stop under ₹510 (day one’s open) risks ₹38. Pick based on how much room you need and size the position so that the loss, if hit, is a small slice of your capital. Our guide on technical analysis for Indian stocks covers how candlestick signals fit with stops and position sizing more broadly.

Target

Candlestick patterns don’t come with built-in targets. Practical options:

• The nearest meaningful resistance above (for a bullish kicker), such as the level where the previous decline started to speed up.
• A fixed reward-to-risk multiple. With ₹26 at risk on Stock A, a 2:1 target would be ₹52 above entry, or about ₹600.
• A trailing stop that follows the move, so you aren’t guessing the top.

What makes a kicker more (or less) trustworthy

Not every two-candle U-turn deserves the same weight. A few things we’d look at before taking one seriously:

• Where it forms. After an extended move, in overbought or oversold territory, is where Investopedia says the signal matters most. In a choppy range, it’s much weaker.
• The reason behind it. A kicker on hard news, like results or a large order, has a real cause behind the shift. A kicker on thin volume with no news at all deserves suspicion.
• Volume. Heavy participation on day two suggests broad conviction rather than a handful of orders pushing the open.
• Size of the gap. A gap of a few paise in a ₹500 stock is noise. You want a clear separation between the two bodies.
• Follow-through. If day three immediately gives back the whole of day two, the market is telling you the kicker failed.

The best kickers have a reason you can read on the exchange website, not just a shape you can see on the chart.

Common mistakes with the kicker pattern

• Calling every gap a kicker. If day two opens inside day one’s body, it’s something else.
• Ignoring the prior trend. A bullish kicker needs a downtrend to reverse. Without one, it’s a gap and a green candle.
• Chasing without a stop. Big gaps can partly reverse even when the pattern is real. Know your exit before you enter.
• Trading illiquid stocks. In thinly traded counters, a handful of orders can create a dramatic-looking open that means very little.
• Forgetting the news. If the gap came from a one-off event that the market quickly reassesses, the reversal can unwind just as fast.

Where the kicker fits in your toolkit

Think of the kicker as a high-quality alert rather than a complete system. It tells you sentiment has flipped sharply. It doesn’t tell you how far the new move will run, or whether the news that triggered it will hold up on a second read. Combine it with support and resistance, the broader trend, volume and the actual announcement, and it becomes a lot more useful. If you trade opening moves regularly, our piece on the gap up gap down trading strategy is a good companion read.

The bottom line

The kicker candlestick pattern is a two-candle reversal where the second candle opens at or beyond the first candle’s open and runs the other way. Bullish kickers flip a downtrend, bearish kickers flip an uptrend, and both usually come with news behind them. They’re rare, they’re easy to confuse with ordinary gaps, and they’re most meaningful after a stretched move. Spot the setup carefully, check what caused it, place a stop beyond the gap, and size the trade so a failed signal is just a small loss.

Disclaimer: This article is for education and information only. It is not investment advice or a recommendation to buy or sell any security. All worked examples use hypothetical prices, not actual market data. Trading and investing involve risk; consult a SEBI-registered adviser before making investment decisions.