Candlestick Charting For Dummies by Russell Rhoads

Author:Russell Rhoads [Rhoads, Russell]
Language: eng
Format: epub, pdf
ISBN: 9781119869979
Publisher: Wiley
Published: 2022-05-27T00:00:00+00:00

FIGURE 8-14: A bearish doji star pattern working in a chart of COP stock.

The day after the signal is completed, COP trades higher but doesn’t breach the high of the signal day. After this near-failure, a slow, steady downtrend favoring the bears takes over.

Failing to give a good short signal

For the losing example of a bearish doji star, I’ll stick with the energy sector, using the XLE ETF. In Figure 8-15, the bearish doji star highlighted in the figure showed up during a bullish trend; you can see that this chart includes a nice up day followed by a doji. All the bearish doji star criteria are in place, but the pattern fails swiftly and mercilessly, and the trend continues with a very strong up day directly after the pattern.

FIGURE 8-15: The bearish doji star pattern failing in a chart of the XLE ETF.

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