This pattern is characterized by a large red body engulfing the prior day’s smaller blue body, which appears during an uptrend. The red body does not necessarily engulf the shadows of the blue candle but totally engulfs its body.
Interpretation: While the market is characterized by a preexisting uptrend, buying on low volumes is observed on the occurrence of a blue candlestick on the first day. The next day, the market opens gap up at new highs. It looks as if the bullish uptrend would continue, however, the uptrend soon loses momentum and the bears take charge during the day. The selling pressure overcomes buying and finally, the market closes below the open of the previous day. Indicating a reversal in trend.
Bearish Doji Star
It consists of a red candlestick followed by a Doji with a downward gap at the opening the next day. This pattern appears in an upward trend and indicates that the trend will reverse.
Following is the list of stocks that are likely to trade with a negative bias on account of the formation of a bearish candlestick pattern.
|Scrip||Stock Price||Candlestick Pattern||View|
|Jet Airways||280.8||Bearish Doji||Bearish|