Definition
Bearish Evening Doji Star consists of three candles and signals a trend reversal. The first day is a long white candle. The second candle’s body is a horizontal line. The last candle forms a Doji Star with a gap in the trend’s direction. The third day is a black candle with its closing price in the body of the candle on the first day. The formation clearly shows the trend’s reversal.
- Trend: Reversal
- Expected trend: Bearish
- Previous trend: Bullish
- Reliability: High
- Type: Bearish
- Number: 3
Recognition
- The market is in an upward trend.
- The first day is a long white candle.
- The second day is a Doji with a gap in the trend’s direction.
- The third day is a black candle.
Interpretation
The first white candle of the formation is followed by a gap upwards. On the second day, the trading range is narrow, the trend seems to break. The reversal comes on the third day, in the form of a black candle. Ideally, there are gaps below and after the middle candle in the Bearish Evening Doji Star formation. The second gap is rare. Its absence does not weaken the formation’s signal.
Important factors
The number of the Dojis can be one, two, or three. The gap of the Doji is not important. The formation is uncommon and highly reliable, but requires a confirmation. The confirmation could come from a black candle with a downward gap or a lower closing price.
