Definition: Get the highest rated stock from Americanbulls for this pattern >>>
This is also a three-candlestick formation signaling
a major bottom reversal. It is composed of a long black
candlestick followed by a doji, which characteristically
gaps down to form a doji star. Then we have a third
white candlestick whose closing is well into the first
session’s black real body. This is a meaningful
bottom pattern.
Recognition Criteria:
1. Market is characterized by downtrend.
2. We see a long black candlestick in the first day.
3. Then we see a Doji on the second day that gaps in
the direction of the previous downtrend.
4. The white candlestick on the third day confirms the
reversal.
Explanation:
Black real body while market is falling down may suggest
that the bears are in command. Then a Doji appears showing
the diminishing capacity of sellers to drive the market
lower. Confirmation of bull ascendancy is the third
day’s strong white real body. An ideal Bullish
Morning Doji Star Pattern must have a gap before and
after the middle line’s real body. The second
gap is rare, but lack of it does not take away from
the power of this formation.
Important Factors:
The Doji may be more than one, two or even three.
Doji’s gaps are not important.
