As of 04/24/2024
Indus: 38,461 -42.77 -0.1%
Trans: 15,078 -358.61 -2.3%
Utils: 893 +6.79 +0.8%
Nasdaq: 15,713 +16.11 +0.1%
S&P 500: 5,072 +1.08 +0.0%
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YTD
+2.0%
-5.2%
+1.3%
+4.7%
+6.3%
|
 39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 |
As of 04/24/2024
Indus: 38,461 -42.77 -0.1%
Trans: 15,078 -358.61 -2.3%
Utils: 893 +6.79 +0.8%
Nasdaq: 15,713 +16.11 +0.1%
S&P 500: 5,072 +1.08 +0.0%
|
YTD
+2.0%
-5.2%
+1.3%
+4.7%
+6.3%
| |
|
39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 | ||
My book,
Encyclopedia of Candlestick Charts
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The bearish doji star candlestick is supposed to act as a bearish reversal pattern but doesn't. In fact, it is a wonderful continuation candle because that is what happens to price -- it continues rising 69% of the time, ranking 8th, where 1 is best. Looking at the candle pattern as it moves from a tall white candlestick, to a doji with a gap between, you would swear that momentum was slowing. It does, but the numbers suggests it picks up again and price moves higher.
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Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 69% of the time
Frequency rank: 43
Overall performance rank: 51
Best percentage meeting price target: 55% (bear market, up breakout)
Best average move in 10 days: -5.77% (bear market, down breakout)
Best 10-day performance rank: 14 (bull market, down breakout)
All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |
Bearish Doji Star
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When I saw that 69% performance rate, I was excited until I learned that it was for a continuation pattern and not a reversal. That number is not as good as it sounds because price is at the top of the candle pattern, in a doji, no less. All price has to do to signal a continuation is close above the top of the doji. That is easy compared to a downward breakout which would require a close below the bottom of the candlestick pattern.
The overall performance rank is 51 which is mid list. That suggests the trend after the breakout is not a long one.
The frequency rank is 43rd, which means you should be able to find the bearish doji star easily in a historical price series. The best average move 10 days after the breakout is a drop of 5.77% in a bear market. The drop is close enough to 6%, which I consider to be a good move, that I will not quibble. The best 10-day performance rank is 14 after a downward breakout in a bull market.
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Upward |
| Configuration | Look for a two-candle pattern in an uptrend. The first candle is a long white one. The next day, price gaps higher and the body remains above the prior body. A doji forms with the opening and closing prices within pennies of each other. The shadows on the doji should be comparatively short. |
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.
Shown in the red circle on the daily chart is a bearish doji star. Price trends upward leading to a tall white candle. The next day, price gaps open higher (in this case, the gap may only be a penny high) and a doji forms. The length of the shadows on the doji, combined (upper plus lower), should be smaller than the body of the white candle. In this example, a gravestone doji appears. The combination does little to halt the price rise. The breakout is upward when price closes above the top of the bearish doji star candlestick pattern.
-- Thomas Bulkowski
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