An Evening Doji Star consists of a long bullish candle, followed by a Doji that gaps up, then a third bearish candle that gaps down and closes well within the body of the first candle.
An Evening Doji Star is a three candle bearish reversal pattern similar to the Evening Star.
The only difference is that the Evening Doji Star needs to be a Doji candle for the second candle.
To identify an Evening Doji Star pattern, look for the following criteria:
- The first candle should be a tall white candle in an upward price trend.
- The second candle should be a doji whose body gaps above the first and third candles. Shadows are ignored.
- The third candle is a tall black candle that closes at or below the midpoint of the first candle
This Evening Doji Star acts as a bearish reversal of the upward price trend because the price rises into the pattern and breaks out downward.
A downward breakout occurs when the price closes below the bottom of the three-candlestick pattern. Since the price in the last candle is already near the low, a downward breakout is expected.