Evening Star

This is a major top reversal pattern formed by three candlesticks. The first candlestick is a long green body; the second one is a small real body that may be green or red. It is characteristically marked with a gap in higher direction thus forming a star. In fact, the first two candlesticks form a basic star pattern. Finally we see the red candlestick with a closing price well within first session’s green real body. This pattern clearly shows that the market now turned bearish.

The stars may be more than one, two or even three.

The color of the star and its gaps are not important.

The reliability of this pattern is very high, but still a confirmation in the form of a red candlestick with a lower close or a gap-down is suggested.

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felix

A computer engineer by profession and loves to develop online systems/websites. A self-taught stock trader who loves to share his knowledge and enjoys learning, expanding knowledge and staying well-informed. Most often he uses candlesticks, Fibonacci Retracement levels, Ichimoku system on his technical analysis but loves to hear some rumors as well.

One Response to Evening Star

  1. […] large red candle that closes below the closing price of Wednesday’s then we will be seeing an Evening Star. Although that formation still needs confirmation. Like in a chess game, do not settle for a 1 move […]

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