Evening Doji Star
Tue, Apr 15An Evening Doji Star is characterized by a long bullish candle, followed by a Doji that gaps up, and concludes with a bearish candle that gaps down, closing well within the body of the first candle. This pattern is a three-candle bearish reversal formation, akin to the Evening Star, with the key distinction being that the second candle must be a Doji.
To recognize an Evening Doji Star pattern, the following criteria should be met:
- The first candle must be a tall white candle in an upward price trend.
- The second candle should be a Doji whose body gaps above the first and third candles, with shadows disregarded.
- The third candle is a tall black candle that closes at or below the midpoint of the first candle.
This Evening Doji Star serves as a bearish reversal signal for the upward price trend, as the price rises into the pattern before breaking downward. A downward breakout is confirmed when the price closes below the bottom of the three-candlestick formation. Given that the price in the last candle is already close to the low, a downward breakout is anticipated.
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