BEARISH TRI
STAR
| Type: | Reversal |
| Relevance: | Bearish |
| Prior Trend: | Bullish |
| Reliability: | Medium |
| Confirmation: | Suggested |
| No. of Sticks: | 3 |
The Bearish Tri Star Pattern is a very rare but significant top reversal pattern. It is formed by three Dojis. The middle Doji is a Doji Star.
Recognition Criteria:
1. Market is characterized by uptrend.2. We see three Dojis on three consecutive days.
3. The second day Doji has a gap above the first and third.
Explanation:
The Bearish Tri Star Pattern appears in a market characterized by uptrend for a long time. When the trend starts to show weakness, we see smaller real bodies. The first Doji is already a matter of considerable concern. The second Doji shows that market now lost its direction. Finally, the third Doji announces the end of uptrend since this now shows utmost indecision leading to reversal of the positions.
Important Factors:
A confirmation on the fourth day is required to show that the uptrend
has reversed. This may be in the form of a black candlestick, a large
gap down or a lower close on the fourth day.