
Doji Star |
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Pattern: reversal
Reliability: moderate
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Identification
A long white day is followed by a Doji that gaps in the direction of the trend. The shadows of the Doji should not be long.
The Psychology
In an uptrend or within a bounce of a downtrend, the market gaps up but does not continue its upward movement. Instead enough bears step up to bring supply and demand back into equilibrium and the stock churns in place. The halt of the uptrend signifies the possibility of a reversal, so confirmation is needed with a weak third day (preferably with volume behind it).
The bearish Doji Star could be the first two days of the bearish Evening Doji Star or the bearish Abandoned Baby. |