Evening Star

What is an 'Evening Star'

An evening star is a bearish candlestick pattern consisting of three candles that have demonstrated the following characteristics:

1. The first bar is a large white candlestick located within an uptrend.
2. The middle bar is a small-bodied candle (red or white) that closes above the first white bar.
3. The last bar is a large red candle that opens below the middle candle and closes near the center of the first bar's body.

As shown by the chart below, this pattern is used by traders as an early indication that the uptrend is about to reverse.

Evening Star

BREAKING DOWN 'Evening Star'

Evening star formations can be useful in determining trend changes, particularly when used in conjunction with other indicators. Many traders use price oscillators and trendlines to confirm this candlestick pattern.

RELATED TERMS
  1. Upside Tasuki Gap

    A candlestick formation that is commonly used to signal the continuation ...
  2. Bullish Abandoned Baby

    A type of candlestick pattern that is used by traders to signal ...
  3. Bearish Harami

    A trend indicated by a large candlestick followed by a much smaller ...
  4. Outside Reversal

    A price chart pattern in which a security's high and low prices ...
  5. White Candlestick

    A point on a candle stick chart representing a day in which the ...
  6. Bar

    A graphical representation of a stock's movement that usually ...
Related Articles
  1. Active Trading

    Star Formations Spotlight Luminary Trades

    Morning, evening and doji stars will have you basking in better trading profits.
  2. Charts & Patterns

    The 5 Most Powerful Candlestick Patterns (NUAN, GMCR)

    Statistics show unusual accuracy for the buy and sell signals of certain candlestick patterns like abandoned baby, evening star, and three black crows.
  3. Charts & Patterns

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  4. Active Trading

    Range Bar Charts: A Different View Of The Markets

    While range bars are not a type of technical indicator, traders can employ this useful tool to identify trends and interpret volatility.
  5. Chart Advisor

    Lighting The Way With Candlesticks

    Learn how candlesticks let you quickly spot the continuation or reversal of a near term trend.
  6. Chart Advisor

    Two Candlestick Patterns Predicting A Bottom

    This article tries to find some bottoms in four stocks using two different candlestick patterns.
  7. Technical Indicators

    Gauging Entry And Exit Signals With Range Bars

    Wide range price bars often generate important signals that traders can use for timely entry or exit.
  8. Chart Advisor

    Are Alcoa And Conoco Set For A Turnaround?

    Bullish candlestick formations will cause traders to add these three stocks to their watch lists.
  9. Charts & Patterns

    Heikin-Ashi: A Better Candlestick

    Enhance trend isolation and prediction of future prices with this technique.
  10. Charts & Patterns

    Advantages Of Data-Based Intraday Charts

    We take a look at these chart intervals and how we can use them to our advantage.
RELATED FAQS
  1. How do I Implement a forex strategy when spotting a Morning Star pattern?

    Learn how to design a forex trading strategy to use for trading the morning star candlestick pattern, an indicator of a bullish ... Read Answer >>
  2. What do the different colored candlesticks mean?

    Candlestick charts have been used in Western trading for many years and are a very popular method of plotting the price action ... Read Answer >>
  3. How is an Evening Star pattern interpreted by analysts and traders?

    Identify the evening star candlestick pattern, and learn why it is interpreted by market analysts and traders as a bearish ... Read Answer >>
  4. How do I implement a forex strategy when spotting a Three White Soldiers Pattern?

    Learn two variations, one aggressive, one more conservative, of a forex trading strategy that can be used with the three ... Read Answer >>
  5. How effective is creating trade entries after spotting a Evening Star pattern?

    Explore the elements of the evening star candlestick pattern, and learn what factors influence the effectiveness of trade ... Read Answer >>
  6. How are Star patterns interpret by analysts and traders?

    Understand the basics of the morning and evening star patterns and how they are interpreted by traders and analysts when ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center