| Doji Star |
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Pattern: reversal
Reliability: moderate
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Identification
A long black 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 a downtrend or within a pullback of an uptrend, the market gaps down
but does not continue its downward movement. Instead enough bulls step
up to bring supply and demand back into equilibrium and the stock churns
in place. The halt of the downtrend signifies the possibility of a reversal,
so confirmation is needed with a strong third day (preferably with volume
behind it).
The bullish Doji Star could be the first two days of the bullish Morning
Doji Star or the bullish Abandoned Baby.
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