This is a major top reversal pattern formed by three candlesticks. The first candlestick is a long white body; the second one is a small real body that may be white. It is characteristically marked with a gap in higher direction thus forming a star. In fact, the first two candlesticks form a basic star pattern. Finally we see the black candlestick with a closing price well within first session’s white real body. This pattern clearly shows that the market now turned bearish.

Recognition Criteria:

1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a small candlestick on the second day with a gap in the direction of the previous uptrend.
4. Finally we see a black candlestick on the third day.

The market is already in an uptrend when the white body appears which further suggests the bullish nature of the market. Then a small body appears showing the diminishing capacity of the longs. The strong black real body of the third day is a proof that the bears have taken over. An ideal Bearish Evening Star Pattern has a gap before and after the middle real body. The second gap is rare, but lack of it does not take away from the power of this formation.

Important Factors:

The stars may be more than one, two or even three.