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.