[Summary]
The evening star is a candlestick pattern that is said to indicate a downward turn when it appears at the end of a rising market.
It generally consists of three lines: the positive line, the small foot, and the negative line.
This is a pattern to see if the buying momentum has weakened and the selling has started to increase.
What is the evening star?
The evening star consists of three candlesticks.
The flow is as follows.
- A big sun ray comes out
- Small candlesticks appear and cause confusion
- A large hidden line appears and the selling becomes stronger.
When this shape appears in the high price range, the uptrend may be losing momentum.
Points to see
| Points to see | meaning |
|---|---|
| exit in the high price range | Beware of ceiling formation |
| The third strong shadow line | strong selling pressure |
| Volume increases | Possibility of full-fledged profit-taking selling |
| Does not grow after good news | Beware of selling everything out |
Points to note
Even if the evening star appears, the market may continue to rise if the overall market is strong. Although this is a warning sign of high prices, it is too early to conclude that this is the ceiling.
Don't judge based on the shape alone; look at whether the stock price can recover after the third dark line. If you can't get it back, it will be a heavy sign that the buyer's momentum has declined.
Summary
The evening star is a pattern that indicates that buying momentum may have slowed down in the high price range.
It is an easy-to-use format for risk management of stock holdings and as a material for considering profit determination.