how an evening star works
a candlestick pattern is a way of presenting certain information about a stock it represents the open high low and close price for the stock over a period of time each candlestick consists of a candle and two wicks the length of the candle is a function of the range between the highest and lowest price during that trading day a long candle indicates a large change in price and a short candle indicates a small change in price long candlestick bodies are indicative of intense buying or selling pressure depending on the direction of the trend short candlesticks are indicative of little price movement the evening star pattern is considered to be a very strong indicator of future price declines its pattern forms over three days special considerationsthe evening star pattern is considered to be a reliable indication that a downward trend has begun but it can be difficult to discern amid the noise of stock price data traders often use price oscillators and trendlines to help identify it reliably and to confirm whether an evening star pattern has in fact occurred it s advisable to consult various technical indicators to predict price movements rather than rely solely on the signals provided by one the evening star pattern isn t the only bearish indicator despite its popularity among traders other bearish candlestick patterns include the dark cloud cover and the bearish engulfing traders have their own preferences regarding what patterns to watch for when they want to detect trend changes 2example of an evening star patternthe following chart provides an example of the evening star pattern the three days depicted here begin with a long white candle indicating that prices have risen from significant buying pressure the second day also shows a rise in prices but the extent of the increase is modest compared to the previous day the third day shows a long red candle in which selling pressure has forced the price to around the midpoint of the first day these are the tell tale signs that an evening star pattern has occurred technical analysts trading this security would consider selling or shorting the security in anticipation of an upcoming decline 