• About us
  • Contacts
  • Email Whitelisting
  • Home
  • Privacy Policy
  • Terms and Conditions
  • Thank you
Daily Gold Index
  • About us
  • Contacts
  • Privacy Policy
  • Terms and Conditions
  • Email Whitelisting
No Result
View All Result
  • About us
  • Contacts
  • Privacy Policy
  • Terms and Conditions
  • Email Whitelisting
No Result
View All Result
Daily Gold Index
No Result
View All Result
Home Stock

Three Bearish Candle Patterns Every Investor Should Know

Daily Gold Index by Daily Gold Index
July 18, 2025
in Stock
0
Three Bearish Candle Patterns Every Investor Should Know

There is no denying that the broad markets remain in a resilient uptrend off the April 2025 low.  But if there’s one thing I’ve learned from many years of analyzing charts, it’s to remain vigilant during bullish phases.  Even though I’ll assume the uptrend is still intact, that doesn’t mean I can stop looking for signs of potential weakness!

With that in mind, here are three bearish candle patterns that often pop up during bullish market phases.  By looking for these patterns in the stocks and ETFs that you own, you can hopefully get ahead of any corrective moves and take profits before it’s too late!

The Shooting Star Pattern

If you see a long upper shadow, little to no lower shadow, and the open and close are close together near the bottom of the day’s range, then you have identified a shooting star candle pattern.  If you’re familiar with the hammer candle pattern, then you can think of this as a hammer candle but basically everything is upside down!

The chart of AT&T (T) has featured a number of shooting star candles so far in 2025.  Just before the selloff in early April, there was a clear shooting star candle after the March rally.  Then during the rally off the April low, a shooting star pattern in early May suggested that the uptrend phase was nearing an exhaustion point.

The Bearish Engulfing Pattern

One of the most recognizable patterns in the candlestick library, the bearish engulfing pattern represents a short-term rotation from accumulation to distribution.  Basically, a large up candle is followed by a large down candle, and the second day’s “real body” (the open-to-close range) engulfs the range of the first day’s real body.  

Look at the strength in the uptrend for Paramount Global (PARA) going into early June.  Then just before the 4th of July weekend, a bearish engulfing pattern suggests a change of character as the bears take control.  It’s worth noting that these candle patterns are not long-term signals, but rather indicate short-term dynamics.  So a bearish engulfing pattern suggests weakness for the next one to three bars.

The Evening Star Pattern

If you took the bearish engulfing pattern, and then added another small candle in the middle of those two days, then you’d have an evening star pattern.  Now most candlestick textbooks will tell you that the “star” day in the middle should include a gap, so there’s no overlap between that day’s range and the other two candles.  In practice, I’ve found most people ignore this detail and rather look for patterns with enough similarities to this basic structure.

Going back to the AT&T chart we used earlier, we can see an evening star pattern at the end of June.  A big day is followed soon after by a big down day, with a small candle in the middle.  This is a great example of where additional weakness led the price below the 50-day moving average, serving to confirm the bearish outlook as represented by the evening star pattern.

It’s so easy to become complacent during an extended bull market rally.  Investors that regularly scan for bearish candle patterns have an edge, as they can anticipate potential turning points before the uptrend changes in dramatic fashion to a new downtrend phase!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.


Previous Post

Gold to Hit US$4,000, Driver for Next Leg Up — West Red Lake’s Shane Williams

Next Post

Musk’s brain implant company filed as a ‘disadvantaged business’

Daily Gold Index

Daily Gold Index

Next Post
Musk’s brain implant company filed as a ‘disadvantaged business’

Musk’s brain implant company filed as a ‘disadvantaged business’

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
Plugin Install : Widget Tab Post needs JNews - View Counter to be installed
  • Trending
  • Comments
  • Latest
E-Power Resources Inc. Announces Board Changes and Additional Staking

E-Power Resources Inc. Announces Board Changes and Additional Staking

August 28, 2025
Kobo Resources to Recommence 2025 Drill Program at the Kossou Gold Project; Appoints Industry Veteran to Support Technical and Regional Growth Strategy

Kobo Resources to Recommence 2025 Drill Program at the Kossou Gold Project; Appoints Industry Veteran to Support Technical and Regional Growth Strategy

August 28, 2025
Google has eliminated 35% of managers overseeing small teams in past year, exec says

Google has eliminated 35% of managers overseeing small teams in past year, exec says

August 28, 2025
Lego hits record revenue in first half of 2025, boosted by brick flowers and cars

Lego hits record revenue in first half of 2025, boosted by brick flowers and cars

August 28, 2025

Recent News

E-Power Resources Inc. Announces Board Changes and Additional Staking

E-Power Resources Inc. Announces Board Changes and Additional Staking

August 28, 2025
Kobo Resources to Recommence 2025 Drill Program at the Kossou Gold Project; Appoints Industry Veteran to Support Technical and Regional Growth Strategy

Kobo Resources to Recommence 2025 Drill Program at the Kossou Gold Project; Appoints Industry Veteran to Support Technical and Regional Growth Strategy

August 28, 2025
Google has eliminated 35% of managers overseeing small teams in past year, exec says

Google has eliminated 35% of managers overseeing small teams in past year, exec says

August 28, 2025
Lego hits record revenue in first half of 2025, boosted by brick flowers and cars

Lego hits record revenue in first half of 2025, boosted by brick flowers and cars

August 28, 2025

Disclaimer: DailyGoldIndex.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

  • About us
  • Contacts
  • Privacy Policy
  • Terms and Conditions
  • Email Whitelisting

Copyright © 2025 DailyGoldIndex. All Rights Reserved.

No Result
View All Result
  • News
  • Economy
  • Investing
  • Stock

Copyright © 2025 DailyGoldIndex. All Rights Reserved.