Evening Doji Star

The Evening Doji Star is a bearish reversal candlestick pattern that signifies a potential end of an uptrend and the start of a downtrend. It's essentially a variant of the Evening Star pattern, with the middle candle being a Doji.

The bullish version of the Evening Doji Star pattern is the Morning Doji Star candlestick pattern.

Here's a breakdown of the Evening Doji Star pattern:

  1. The pattern consists of three candlesticks. The first is a long green (or white) candlestick in a prevailing uptrend, indicating a clear bullish sentiment.

  2. The second candlestick is a Doji — a candlestick where the opening and closing prices are virtually the same, resulting in a very small body. The Doji should gap above the close of the first candlestick and it indicates market indecision.

  3. The third candlestick is a red (or black) candle that opens within the body of the Doji and closes below the midpoint of the body of the first candle, showing a change from the initial bullish sentiment to a bearish sentiment.

The Evening Doji Star is a signal that the bears have taken over from the bulls and that a reversal in trend may be about to occur. As with all candlestick patterns, it's important to wait for confirmation before acting. This could be in the form of a fourth candle that continues the bearish trend or other confirming indicators such as rising volume or a bearish crossover from a technical indicator like the MACD.

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