BEARISH EVENING DOJI STAR PATTERN

BEARISH EVENING DOJI STAR PATTERN:

This is a major top reversal pattern formed by three candlesticks. The first candlestick is a long white body; the second is a doji characterized by a higher gap thus forming a doji star. The third one is a black candlestick with a closing price, which is within the first day’s white real body. It is a meaningful top pattern.

The first white body, while the market is in an uptrend, shows the continuing bullish nature of the market. Then a Doji appears showing the diminishing power of the longs. The strong black real body on the third day proves that bears have taken over. An ideal Bearish Evening Doji Star Pattern has a gap before and after the middle real body. The second gap is rare, but lack of it does not take away from the power of this formation.

The Doji may be more than one, two or even three. Doji’s gaps are not important. The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.