Evening Star Candlestick Pattern

An Evening Star candlestick pattern is a very strong bearish reversal candlestick pattern. There are even a few different types of Evening Star candlestick patterns Evening Doji Stars, Shooting Stars and Abandoned Baby Tops are all different types of Evening Star candlestick patterns.

All Evening Star candlestick patterns are considered extremely bearish reversal patterns. However, some specific ones, like an Abandoned Baby Top candlestick pattern, send an even stronger bearish reversal signal than other Evening Star candlestick patterns.

Evening Star candlestick patterns consist of a 3 candlestick group. This group of candlesticks develop at the top of uptrends. This candlestick pattern is usually a signal of a major trend change for the price. The uptrend that the price was in just changed trend and turned into a downtrend. Beware of the reversal powers of Evening Star candlestick patterns.

From a trading perspective, the stock's share price continues its ascent and bullish investors appear to be in full control. The previous candlestick was a bullish, long green candlestick. This is the 1st candlestick in the set of 3 required for an Evening Star candlestick pattern.

At the open of the next trading session, bullish investors are feeling confident as the share price tends to gap-up from the previous candlestick's real body. This bullish euphoria continues through the early part of the trading session. But at some point during the trading session, bearish investors stage a selling rally and the share price starts falling again. This can be due to new short positions being taken. It can also be due to normal profit taking at the top of a long uptrend and gap-up.

While bullish investors keep the price off its low from the trading session by its close, bearish investors have definitely gained the upper hand. This is the 2nd candlestick in a series of 3 for the Evening Star candlestick pattern.

The Evening Star candlestick pattern is confirmed during the third trading session. Bearish investors continue their rally that started during the 2nd trading session. This causes a bearish long red-colored candlestick to develop by the end of the trading session. This is 3rd and final candlestick for a fully completed Evening Star candlestick pattern.

Requirements

The following are the requirements are similar for an Evening Star candlestick pattern. This pattern, first and foremost, must develop at the top of a long, established uptrend. The Evening Star candlestick pattern is made up of a group of 3 consecutive candlesticks. Here are some additional requirements.

• The 1st candlestick is a bullish candlestick that has a long, green colored real body
  • the 1st candlestick tends to leave a medium-length upper shadow
• The 2nd candlestick is also green colored
  • The real body of the 2nd candlestick is quite a bit smaller than the 1st candlestick's real body
  • The 2nd candlestick opens higher than the 1st candlestick's real body
  • The real bodies from the 1st & 2nd candlesticks should not touch
• The 3rd candlestick has a red colored real body since it is a bearish candlestick
  • The real body of 3rd candlestick must penetrate low into the real body of the 1st candlestick
  • The real bodies of the 2nd and 3rd candlesticks should not touch
  • The 3rd candlestick pattern typically starts with a gap-down in the morning

Abandoned Baby Top Requirements

Here are the specific requirements for an Abandoned Baby Top candlestick pattern. This pattern is not a very common pattern that develops, but pay attention when it does. The uptrend is.....

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