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In the previous chapter, Nifty chart (.in), we have seen how bullish patters form during trend reversals. In this lesson, we are going to learn about bearish candlestick patterns like hanging man, bearish engulfing and evening star that form during market phase change, bullish to bearish.

Following are some of the important Bearish patterns

  • Shooting Star
  • Hanging Man
  • Evening Star
  • Bearish Engulfing
  • Harami
  • Evening Doji Star

Let us discuss all of them in detail:

Shooting Star:

Shooting star is a candlestick pattern which forms a reversal trend from bullish to bearish. This looks like an inverted hammer in shape with body at the lower end and body at the higher end. As discussed in our previous article, bullish patterns here too colour of the candle should not be considered. Once again, logic remains same - for a red candle, the low stays almost at the bottom which tells us that the markets are falling. As well, green candle too indicates a bear phase as the long body shows that the markets are not likely interested to stay long though the overall phase if positive.

shooting star candlestick pattern

Trade technique by SM Technicals

  • First candle - Inverted hammer shape formation (no matter whether its green or red)
  • Confirmation candle - red candle with the formation of lower lows (closing below the previous candle's close)
  • Trade initiation candle - shorting with a stoploss of first candles high and target of 3 to 5 periods

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