Candlestick Patterns - Evening Star / Evening Doji Star

It's been so long since I wrote here that I had to read my last post to get myself in the 'zone' again. I almost forgot what we were discussing here. Anyway, I am back to make a post here and that is important. Let's get on with that.

Evening Star

It is easy to guess that this patterns is opposite of Morning Star. Not enough innovation (thankfully) in naming these patterns. So Evening Star is a three candlestick bearish reversal pattern. It is found at the end of a uptrend. The first candle is a long white (or green) candle indicating a day belonging to bulls where stock saw the positive price movement as per the continuing trend. Second candle is again a white candle indicating another positive day but this time body is not as long and but the shadows are long indicating indecision in the market. Third day confirms the reversal by being a black (or red) candle indicating bears taking over control. See below.

as in the earlier post, the strength of the reversal is judged by two things. The volumes of the trade on the third day and the length of the black candle with respect to the white candle of the first day. If the black candle of the third day is reaching or going up more than the half of the first day white candle; it is considered very bearish.

Evening Doji Star

Evening Doji Star is as you can guess is similar to above pattern with only difference being the middle candle is a (black or white) Doji instead of a simple black candle. See below.

Evening Doji Star is considered a stronger bearish reversal pattern. One very important thing to note here is the second candle of Doji can be more than one. It can be one, two or even three Dojis in some cases.

Example of Evening Doji Star above is from the daily chart of CNX NIFTY Junior Index. The Evening Doji Star was formed around mid July at a level of approximately 11400. Since then it had corrected to a level of 9600 (more than 15% correction) by end August. Please excuse me for the bad graphics.

This is as far as Evening Star / Evening Doji Star. We will see Three White Soldiers / Three Black Crows next. Thanks for bearing with me in the meantime. I am still in Singapore with no clear input on when to return. Could be a month or so till I am stuck here. Have posted some snaps of Sentosa Island on FB.

Missing NIFTY here.