Outside Day Candlestick Pattern: The Pair at Texas Instruments' November 2025 Low and PayPal's August 2022 Top

On November 20, 2025, the day the Nasdaq turned a rally on Nvidia's results into a 2.2% loss, Texas Instruments traded above the previous day's high and below its low, then closed near the bottom. Bought at that close with a stop under the day's low, the trade risked 60 cents a share, 0.4%. By May 14, 2026 the stock was up 101.0%, at a record close.

On August 16, 2022, at the top of the summer's bear-market rally, PayPal did the same at its highest price since April. Sold at that close with a stop above the day's high, the trade risked 0.9%. By December 28, 2022 the stock was down 33.8%.

Same two bars, opposite moves. An outside day says both sides pushed past the day before, and the first close out of its range says who won. Neither stock has traded through its stop since. Here is how to read an outside day, where the stop goes, and how to find the next one.

What the outside day did#

An outside day at a low is a buy for the bounce. One at a high is a sell signal for holders and an entry for short sellers.

The $10,000 and reward rows use the 120-session numbers. Prices are split-adjusted, as on the chart.

The outside day in one table#

An outside day is two daily candles. Day 2 trades above day 1's high and below day 1's low, so its range covers day 1's on both ends. Buyers and sellers each pushed past the day before, and neither won the day outright.

These are the rules the VCP Scanner terminal uses to name an outside day on a daily chart.

The bodies and the colours do not matter either. Texas Instruments' day 2 was red and closed near its low. PayPal's was red too, with a long lower shadow.

The outside day and its look-alikes#

A bullish engulfing or a bearish engulfing looks at the bodies. A bullish key reversal looks at where day 2 closes. An outside day looks only at the range. Many engulfings and key reversals are outside days too, and then the terminal names them first. Texas Instruments' and PayPal's outside days had no other name. The opposite pattern, where day 2 fits inside day 1, is the inside day.

Example 1: Texas Instruments (TXN) at its November 2025 low, Nov 20, 2025#

Open TXN in the VCP Scanner terminal →

Nvidia had reported strong results the evening before, and the market opened higher. The rally faded after a stronger-than-expected jobs report dimmed hopes of a December rate cut: the Nasdaq closed 2.2% lower and the S&P 500 1.6% lower. Texas Instruments opened at 158.16, edged past day 1's high, then fell through day 1's low and closed at 153.33, 60 cents above the day's low.

What followed:

• Next session (Nov 21): closed at 159.40, up 4.0%, its first close above the outside day's high of 159.25. Its low that day, 153.41, is the lowest Texas Instruments has traded since.
• Ten sessions later (Dec 5): 182.54, +19.1%.
• Feb 11, 2026: 226.56, +47.8%, a record close.
• May 14, 2026: 308.17, +101.0%, another record close. That is 258 times the 0.60 risked on each share.
• The low of 152.73 was never broken. On Nov 6, 2026 TXN closed at 277.36, 80.9% above the outside day's close.

No 5% gap came in the first 60 sessions. One did about a seventh of the climb to May 14: Apr 23, 2026, the morning after Texas Instruments' first-quarter report, when the stock rose 19.4% to a record close, its best day since 2000.

With $500 at risk, the 60-cent stop sized the trade at 833 shares, about $127,724, more than most accounts hold. At the May 14, 2026 close those shares were up $128,982. Buy fewer shares and you risk less than $500; the stop stays where it is.

Example 2: PayPal (PYPL) at its August 2022 top, Aug 16, 2022#

Open PYPL in the VCP Scanner terminal →

PayPal had risen 52.5% from its Jun 30 low. On Aug 2 it beat profit estimates, announced a $15 billion buyback and confirmed a $2 billion stake from the activist fund Elliott Management. The outside day came on the day the S&P 500 closed at the top of its summer rally, the same day Amazon's spinning top marked its top.

What followed:

• Next session (Aug 17): closed at 99.42, down 2.6%, its first close below the outside day's low of 100.16.
• Ten sessions later (Aug 30): 91.80, −10.1%.
• Nov 4, 2022: 75.18, −26.4%.
• Dec 28, 2022: 67.55, −33.8%. That is 36.3 times the 0.95 risked on each share.
• The high of 103.03 was never broken. PayPal's highest price since is 101.00. On Nov 6, 2026 it closed at 59.24, 42.0% below the outside day's close.

One 5% gap down came in the fall: the morning of Oct 13, 2022, after a hot inflation report, and PayPal closed above the day before that same afternoon. The one 5% gap up, on Nov 10, went against the short.

With $500 at risk, the stop sized a short at 526 shares, about $53,694. A tight stop makes a big position. At the Dec 28, 2022 close the short was up $18,163.

Where an outside day counts: key levels#

An outside day on a level is a test of that level from both sides in one session. In the terminal, the Only at a key level switch is on by default. For an outside day it keeps the ones at any of these:

Neither example sat on one of these levels. Texas Instruments' came at a fresh 60-session low and PayPal's at a fresh 60-session high. To see ones like them, turn Only at a key level off.

Outside days are common: on 132 stocks over the last five years, about one session in eleven was one. In the middle of a range they mean little. Texas Instruments was in Stage 1, Stan Weinstein's basing stage, and its outside day marked the base's low. PayPal was in Stage 4, the declining stage, and its outside day marked the top of a rally inside the decline.

How to trade an outside day#

1. Find the place. Look for an outside day at a prior high or a fresh multi-month high after a rally, or at a prior low or a multi-month low after a decline, like PayPal's in August 2022 and Texas Instruments' in November 2025.
2. Check the range. Day 2's high above day 1's high and its low below day 1's low, on a range of at least half the 14-day ATR. The close does not count: Texas Instruments' closed near its low.
3. Wait for the close out of day 2's range. At a low, buy the first close above day 2's high. At a high, sell the first close below day 2's low. Both examples gave that close the next session. Some traders take day 2's own close instead, an entry closer to the stop, as in the table above.
4. Put the stop on the other side. Under day 2's low when you buy, above day 2's high when you sell. The terminal draws no stop for an outside day, so set it yourself from day 2's high or low.
5. Size from the stop. Shares = money at risk ÷ (entry − stop). With $500 at risk on TXN: 500 ÷ (153.33 − 152.73) = 833 shares. When the stop is that close, check that the position fits your account.

Find outside days on any chart in VCP Scanner#

• Open a stock in the terminal, for example TXN or PYPL.
• Open Candles in the chart toolbar and tick Outside day under Neutral.
• Only at a key level is on by default. Turn it off to see every outside day on the chart, and expect many.
• The chart jumps to the latest outside day. A dot marks each one under the pair, and the inspector shows both dates, day 1 → day 2.
• The inspector lists the close, level, volume and stage. When the outside day is the bar's only name it shows no stop, because it points neither way. Walk through the others with the ← and → keys.
• Mark the ones you care about with the drawing tools. The arrows in the charts above are the Arrow Marker (Alt+A): click where the arrow starts, then click the candle.

Candles are free, on daily, weekly and monthly charts.

Bottom line#

• An outside day is a second day that trades past both ends of the first: both sides pushed, and the next close out of its range picks the direction.
• Texas Instruments' marked its November 2025 low and PayPal's its August 2022 top. They risked 0.4% and 0.9%. Texas Instruments rose 101.0% within 120 sessions, and PayPal fell 33.8%.
• Day 2's other end is the stop. It defines your risk before you take the trade.

Data: VCPScanner daily market data through Nov 6, 2026, split-adjusted. The examples are for education, not recommendations.