What is an Evening Star?
An Evening Star is a technical analysis pattern that is used to identify potential reversals in the price of a security. It is a three-candlestick pattern that consists of a large bearish candle, followed by a smaller bullish candle, and then a large bearish candle. The pattern is considered to be a strong indication that the security’s price is about to reverse direction and move lower.
History of the Evening Star
The Evening Star pattern was first identified by Charles Dow, the founder of Dow Theory. He observed that when a security’s price moved higher, it often reversed direction after a three-candlestick pattern. This pattern was later named the Evening Star, as it resembled the evening sky.
The Evening Star pattern is a popular tool among technical analysts, as it can be used to identify potential reversals in the price of a security. It is often used in conjunction with other technical analysis tools, such as support and resistance levels, to confirm the potential reversal.
Table of Comparisons
| Pattern | First Candle | Second Candle | Third Candle |
|---|---|---|---|
| Evening Star | Large Bearish | Small Bullish | Large Bearish |
Summary
The Evening Star is a three-candlestick pattern that is used to identify potential reversals in the price of a security. It was first identified by Charles Dow and is a popular tool among technical analysts. It is often used in conjunction with other technical analysis tools to confirm the potential reversal. For more information about the Evening Star pattern, you can visit websites such as Investopedia and StockCharts.
See Also
- Bullish Engulfing Pattern
- Bearish Engulfing Pattern
- Morning Star Pattern
- Three White Soldiers Pattern
- Three Black Crows Pattern
- Abandoned Baby Pattern
- Harami Pattern
- Doji Pattern
- Gravestone Doji Pattern
- Hammer Pattern
