Sunset Star Pattern: Reverse Signal in the Market

The Evening Star represents a technical pattern consisting of three candlesticks that acts as the bearish counterpart to the Morning Star. This pattern is characterized by a specific sequence: a large green candle (bullish), followed by a small candle (that shows market indecision), and concluded by a large red candle (bearish).

This technical pattern signals a potential reversal of the bullish trend and becomes particularly relevant when the third candle manages to erase the gains made by the first. From the perspective of market analysis, the Evening Star reflects how buying momentum loses strength after an upward movement, giving way to selling pressure that dominates the scene.

To correctly identify this pattern, it is important to observe:

• The first bullish candle must show considerable volume and strength.
• The central candle should reflect indecision, with a small body and variable shadows.
• The third bearish candle must close below the midpoint of the first, confirming bullish exhaustion.

When a Evening Star appears on higher time frame charts, its reliability as a trend reversal indicator increases significantly, providing strategic opportunities for technical traders.