Also known as: Evening star reversal · Evening doji star
An evening star is a three-candle bearish reversal pattern that forms at the top of an advance. It consists of a long bullish candle, a small “star” candle that trades above it, and a long bearish candle that closes at least halfway into the first candle’s body. Read in sequence, it shows buyers in control, then hesitation, then sellers taking over.
What it looks like
In an uptrend, a strong green candle extends the rally. The next candle opens higher but makes little progress; its small body, sometimes a doji or a shooting star, signals that buying has stalled. The third candle is a strong red one that erases a large part of the first candle’s gain. The small middle candle sits above the other two like the first star of the evening.
The evening star’s bullish counterpart is the morning star. Without its middle candle, the sequence often resembles a bearish engulfing.
How to identify it
- A clear prior uptrend.
- Candle 1: a long bullish candle continuing the advance.
- Candle 2: a small-bodied candle (either color) that opens above the first candle’s close. In stocks it often gaps up; in 24/7 markets it simply sits at the top of the first candle.
- Candle 3: a long bearish candle that closes at least halfway down the body of candle 1.
- Location: ideally at a resistance level, a prior high or a round number.
- Volume: ideally heavier on candle 3 than on candle 2.
How to trade it
- Entry: on the close of the third candle, or on a break below its low.
- Stop: above the high of the star candle.
- Target: the nearest support, typically the last higher low of the advance, or a multiple of the risk.
Worked example. A stock climbs from $62 to $80. A long green candle runs from $74.20 to $79.60. The next candle opens at $80.30, trades between $79.90 and $81.20, and closes at $80.60. The third candle opens at $80.10 and closes at $75.40, below the first candle’s midpoint of $76.90. You go short at $75.40 with a stop at $81.50, above the star’s high, risking $6.10 per share. The last higher low of the rally sits at $63.20, a potential move of $12.20, which is a risk/reward of 1 : 2. To set intermediate targets along the way, the Fibonacci calculator gives the retracement levels of the whole advance, and the position size calculator matches your size to the $6.10 stop.
Confirmation: volume, RSI, sentiment
- Volume: the textbook profile is strong volume on the first candle, light volume on the star, then a pickup on the third candle as sellers arrive.
- RSI: an evening star from overbought readings, or alongside a bearish divergence, carries more weight.
- MACD: a bearish cross soon after the pattern supports the reversal.
- Location: an evening star that forms the second peak of a double top or rejects a well-known resistance is much more meaningful than one in the middle of a trend.
- Sentiment: evening stars often appear when optimism is at its loudest. A decisive red third candle while the crowd is still celebrating can be an early sign that the mood is about to turn.
Common mistakes
- Accepting a weak third candle. A red candle that barely dents the first candle’s body is not a reversal.
- Ignoring the trend. An evening-star shape in a flat range is not a top.
- Stops too tight. A stop above the third candle instead of above the star is easily hit by a retest.
- Fighting a strong higher-timeframe trend. An evening star on a low timeframe within a powerful weekly uptrend often fails.
- Entering too late. If the third candle is enormous, the stop above the star may be very far; wait for a pullback or reduce size.
Reliability caveat
The evening star is commonly regarded as one of the stronger candlestick reversal signals, because it shows a complete swing from buying to selling over three candles. It is still a probabilistic setup. Its reliability improves with a clear prior uptrend, location at resistance, a decisive third candle and supportive volume, and declines in strong trends or on very low timeframes. Define your invalidation level before entering.
Spot it automatically with SnapPulse
Take a screenshot or photo of any candlestick chart and SnapPulse identifies patterns such as the evening star with a directional bias and confidence percentage, plots support and resistance on the candles, and suggests an entry zone, stop, target and risk/reward ratio in about five seconds. Live X sentiment lets you compare the crowd’s mood with the technical read. Download SnapPulse to try it.
Educational content — not financial advice.
Updated
