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Abandoned Baby
Belt Hold
Breakaway
Concealing Baby Swallow
Doji Star
Dragonfly Doji
Engulfing
Gravestone Doji
Hammer
Harami
Harami Cross
Homing Pigeon
Inverted Hammer
Kicking
Ladder Bottom
Mat Hold
Matching Low
Meeting Lines
Morning Doji Star
Morning Star
Piercing Line
Rising Three Methods
Separating Lines
Side by Side White Lines
Stick Sandwich
Three Inside Up
Three Line Strike
Three Outside Up
Three Stars In the South
Three While Soldiers
Tri Star
Unique Three River Bottom
Upside Gap Three Methods
Upside Tasuki Gap
Morning Doji Star
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Pattern: reversal
Reliability: high

Identification
A long black day is followed by a Doji that gaps in the direction of the trend. The third day is a white day which closes in the top half of the black day.

The Psychology
In a downtrend or during a pullback within 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. This is the bullish Doji Star formation. A subsequent follow through gap up that closes above the midpoint of the black day completes the Morning Doji Star and confirms the reversal.

The bullish Morning Doji Star is similar to the bullish Abandoned Baby and bullish Morning Star.



AMH rallied nicely on solid volume before trending sideways and establishing support at around 27. Then a bullish Morning Doji Star formed, volume picked up, and the stock continued to move up. Although Morning Doji Star formations are considered reversal patterns, their reliability increases significantly if you play them at support.

 

 

 

 

 

 

 



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