EVENING STAR PATTERN IN NIFTY

TODAY NIFTY JUST CLOSING BELOW 20 SMA AND SUPPORT LINE, INDICATING WEAKNESS.

RESISTANCE @ 5020

SUPPORT @ 4931 - 4890 - 4850 - 4830

BEARISH EVENING STAR FORMED,SHOWS THAT MARKET TURNED NEGATIVE.
WHAT IS EVENING STAR PATTERN..?SEE EXPLANATION

Recognition Criteria:

The Evening Star Pattern is a bearish reversal pattern, usually occuring at the top of an uptrend. The pattern consists of three candlesticks

On Day 1 . We see a long white candlestick. On the first day, bulls are definitely in charge, usually new highs were made.

On Day 2, we see a small candlestick with a gap in the direction of the previous uptrend.

On Day 3, we see a  black candlestick that moves well within the first period’s of the long white candlestick.

Explanation

Evening Star is a major top reversal pattern formed by three candlesticks.

Evening Star formation is one of the most reliable candlestick pattern for reversing from a uptrend to an downtrend. This pattern clearly shows that the market now turned bearish.

The first part of an Evening Star reversal pattern is a large bullish green candle. 

On the first day, bulls are definitely in charge, usually new highs were made.

The second day begins with a bullish gap up. It is clear from the opening of Day 2 that bulls are in control. However, bulls do not push prices much higher. 

The candlestick on Day 2 is quite small body and can be bullish or bearish which imply the incapacity of buyers to push the market to higher.

Day 3 begins with a strong black candlestick gap down  and bears are able to press prices even further downward, often eliminating the gains seen on Day 1 proves that bears have taken control.

 An ideal Bearish Evening Star Pattern has a gap before and after the middle real body.

A gap between the first day and the second day adds to the probability

that a reversal is occurring.

The third day is a large sell-off day. If there is big volume during these days, it shows that the ownership has dramatically changed hands.

The colour of the star and its gaps are not important.

The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.