The Evening Star is one of the most reliable bearish reversal patterns in candlestick analysis. This three-candle formation signals the end of an uptrend and often marks the beginning of a significant decline. Just as the evening star appears before nightfall, this pattern warns traders that bearish conditions are approaching.
What is the Evening Star Pattern?
The Evening Star is a three-candlestick bearish reversal pattern that forms at the top of an uptrend. It consists of a large bullish candle, followed by a small-bodied candle that gaps up (the star), and then a large bearish candle that closes well into the first candle's body.
Visual Description: Picture three candles in sequence - a tall green candle, then a small candle (any color) positioned higher like a star in the sky, and finally a tall red candle that falls back down. The formation looks like a star between two larger candles.
Evening Star Formation Requirements
For a valid Evening Star pattern, these elements must be present:
First Candle (Bullish)
- A large bullish (green) candle confirming the uptrend
- Should have a substantial body showing strong buying
- Represents continued bullish momentum
Second Candle (The Star)
- Small-bodied candle (can be bullish, bearish, or doji)
- Gaps up from the first candle's close
- Body should not overlap with first candle's body
- Represents indecision - buyers exhausting, sellers emerging
Third Candle (Bearish)
- A large bearish (red) candle
- Opens below the star's body
- Closes at least halfway into the first candle's body
- Confirms the bearish reversal
Psychology Behind the Evening Star
The pattern tells a story of shifting control from bulls to bears:
- Day 1: Bulls remain in control, pushing price sharply higher. Buyers are confident the uptrend will continue.
- Day 2: Price gaps up on the open, but buying stalls. Neither bulls nor bears can gain control. This small candle shows the first sign of buyer exhaustion.
- Day 3: Bears step in aggressively. Price gaps down and continues lower throughout the day, closing well below the midpoint of Day 1's candle. Power has shifted from buyers to sellers.
Evening Star Variations
Evening Doji Star
When the middle candle is a Doji (open equals close), the pattern is called an Evening Doji Star. This variation is considered even more powerful because the Doji shows complete indecision at the top before the bearish reversal.
Evening Star with Gap
In the ideal Evening Star, both the star candle gaps up from the first candle and the third candle gaps down from the star. In modern markets with extended hours trading, perfect gaps are less common, but the pattern remains valid.
Evening Star Example
Stock XYZ has rallied from $50 to $80 over a month.
Day 1: Opens at $77, closes at $80 (large green candle)
Day 2: Opens at $82, trades in a tight range, closes at $81.50 (small doji)
Day 3: Opens at $80, closes at $74 (large red candle)
The third candle closes below the midpoint of Day 1 ($78.50), confirming the Evening Star.
How to Trade the Evening Star
Entry Strategies
Conservative Entry
Wait for the third candle to complete and close below the first candle's midpoint.
Enter short on the open of the fourth candle or on a break below the third candle's low.
This confirms the pattern but may miss some of the move.
Aggressive Entry
Enter short during the third candle once price crosses below the midpoint of the first candle.
This captures more of the move but has higher risk if the candle reverses.
Stop Loss Placement
- Above the star: Place stop above the high of the middle (star) candle
- Above the pattern: For wider stop, place above the high of the entire formation
- Choose based on your risk tolerance and position size
Profit Targets
- Previous support levels from the uptrend
- Fibonacci retracement levels (38.2%, 50%, 61.8% of prior rally)
- Measured move: Height of the pattern projected downward
- Key moving averages as potential support targets
Factors That Increase Reliability
Resistance Levels
An Evening Star at a key resistance level is significantly more reliable:
- Previous swing highs
- All-time highs or 52-week highs
- Key moving average resistance
- Round psychological numbers ($100, $50)
- Fibonacci extension levels
Volume Pattern
- High volume on Day 1 shows buying climax
- Lower volume on Day 2 (the star) shows exhaustion
- High volume on Day 3 confirms selling interest
Overbought Conditions
- RSI above 70 when pattern forms
- Price extended above Bollinger Bands
- MACD showing bearish divergence
- Price far above moving averages
Third Candle Strength
- Larger third candle = stronger signal
- Third candle should close below first candle's midpoint at minimum
- Ideally closes below first candle's open for strongest signal
Evening Star Pattern Statistics
Historical analysis shows these approximate success rates:
- Standard Evening Star: 65-70% bearish reversal rate
- Evening Doji Star: 70-75% bearish reversal rate
- At key resistance with volume: 75-80% success rate
- Average price decline: 5-10% in the following 10 days
The Evening Star is considered one of the more reliable reversal patterns, particularly when appearing at significant resistance levels.
Common Mistakes to Avoid
- Not waiting for completion: The pattern is not confirmed until the third candle closes
- Weak third candle: If the third candle does not close at least to the first candle's midpoint, the pattern is not valid
- No preceding trend: Evening Stars need a clear uptrend to reverse
- Ignoring context: Not checking resistance levels or overbought conditions
- Tight stops: Placing stops too close to the star's high gets stopped out prematurely
- Wrong timeframe: Evening Stars on intraday charts are less reliable than daily or weekly
High-Probability Evening Star Setup
Stock ABC rallies from $80 to $120 (50% gain). At $120:
Price hits all-time high resistance
RSI reaches 78 (deeply overbought)
Day 1: Large green candle from $115 to $120
Day 2: Doji at $122 on low volume
Day 3: Large red candle from $120 to $112 on high volume
This setup has multiple confirming factors for a high-probability short trade.
Evening Star vs. Similar Patterns
Evening Star vs. Morning Star
The Morning Star is the bullish opposite of the Evening Star. Morning Star appears at downtrend bottoms (bullish reversal), Evening Star appears at uptrend tops (bearish reversal).
Evening Star vs. Three Black Crows
Both are bearish reversal patterns, but Three Black Crows consists of three consecutive bearish candles, while Evening Star has a bullish candle, a star, and a bearish candle.
Evening Star vs. Bearish Engulfing
Bearish Engulfing is a two-candle pattern while Evening Star is three candles. Evening Star includes a period of indecision (the star) before the reversal.
Evening Star vs. Shooting Star
The Shooting Star is a single candle pattern while Evening Star requires three candles. Evening Star typically signals stronger reversals due to its more complex formation.
Using Evening Stars for Trade Management
Even if you do not short, Evening Stars are valuable for managing long positions:
- Exit long positions when confirmed Evening Star forms
- Tighten stop losses when star candle appears
- Take partial profits before waiting for confirmation
- Avoid adding to long positions during pattern formation
Combining Evening Star with Indicators
RSI Confirmation
Evening Star with RSI above 70 showing bearish divergence is a high-probability short setup.
MACD Cross
An Evening Star combined with a MACD bearish crossover adds confirmation to the reversal signal.
Moving Average Rejection
When the star candle forms at or near key moving average resistance, the pattern is more reliable.
Track Your Evening Star Trades
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Summary
The Evening Star is a powerful three-candle bearish reversal pattern that appears at the top of uptrends. It consists of a large bullish candle, a small-bodied star that gaps up, and a large bearish candle that closes well into the first candle's body. The pattern shows the transition from bullish to bearish control through a period of indecision. For highest reliability, trade Evening Stars at key resistance levels with volume confirmation and overbought indicator readings. The Evening Doji Star variation, where the middle candle is a doji, is considered even more reliable.
Learn more: Morning Star pattern and Three Black Crows.