Bearish Evening Star
This is a three-candlestick pattern signaling a major top reversal. It is composed of a white candlestick followed by a short candlestick, which characteristically gaps up to form a star.
Then we have a third black candlestick whose closing is well into the first session’s white body. This is a meaningful top pattern.
How to identify
- 1st day is a long white day.
- 2nd day gaps above the 1st day’s close.
- 3rd day is a long red day.
The 2nd day gaps higher, but trades in a small range. The bearishness of this indecision is confirmed by the lower close of the 3rd day. Look for lower prices.