65-Day Academy · Day 8 · Reading Charts
Morning & Evening Star
The three-act story
Evening star (top): 1) strong green candle extends the rally; 2) a small-bodied candle "stars" above (indecision — the push up stalls); 3) a strong red candle closes deep into candle 1's body. Bulls had momentum, hesitated, then lost. Morning star is the same inverted at bottoms.
Why the middle candle matters
The star is the tell: momentum died. Any small body (doji, spinning top) gap-ish above the trend works. The stronger candle 3 closes into candle 1's body, the more decisive the transfer. Like all patterns: strongest at prior highs/lows or S/R zones with volume expansion.
Base rates
Bulkowski's backtesting: evening stars reverse roughly 65–70% of the time in a bear-market context — good odds, never certainty. The stop goes above the star's high (evening) / below the star's low (morning); the invalidation is structural, not arbitrary.
What you'll practise
Order the three candles of a bearish Evening Star as they must appear (1st → 2nd → 3rd).
15 XP in the app · introductory
Sources
- Evening StarInvestopedia
- Morning StarInvestopedia
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.