Investor Glossary-evening starInvestor Glossary-evening starInvestor Glossary-evening starInvestor Glossary-evening starInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Evening Star

The HTML to link to this page
 

An evening star is a candlestick trading pattern that traders consider a reliable signal of a bearish reversal. A long white candle, followed by a very short candle that gaps above the white candle (i.e. 1st gap), followed by a long black candle that gaps below the short candle (i.e. 2nd gap), characterizes the evening star. Although the 2nd gap is not required for an evening star pattern to be valid, an ideal evening star pattern would typically have both gaps. In currency trading, however, given the 24-hour trading environment (i.e. day 1 closing price=day 2 opening price), the evening star pattern tends to manifest without any gaps. The short second candle of the evening star may either be white or black. A short candle suggests buying pressure is weakening and selling pressure has started to assert itself. The third candle of the evening star is considered confirmation of the reversal. Expert traders believe the evening star is most reliable when it occurs after an uptrend. The evening star pattern is very similar to the bearish abandoned baby which has a doji rather than a short candle as its second candle. The bullish counterpart of the evening star is the morning star.



Rate this Evening Star definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: liquidity ratio, annual return, wholly-owned subsidiary, debt service coverage, margin rate, 1031 exchange, covered put, inflation, EBITDA, irrevocable trust, deferred tax, open position, 1035 exchange, ex-dividend date, stock split, labor relations, cancelled check, required rate of return, stock market close, limit order, real GDP, APR, in escrow, quality assurance, FTSE, LIBOR, per diem, FICO score, current ratio, Zero Cost Collar, average price per share, class C shares, deferred revenue, VIX, retained earnings, implied volatility, ex-dividend, dividends payable, option premium, balance sheet, command economy, minority interest, Key Rate Duration, diluted share, phantom income, risk management, 144a, reverse mortgage, 401a


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use