Morning Doji Star

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Figure 1.

Figure 1. Morning Doji Star pattern.

Japanese name: ake no myojyo doji bike
Forecast: bullish reversal
Trend prior to the pattern: downtrend
Opposite pattern: Evening Doji Star

Construction:

  • First candle
    • a candle in a downtrend
    • black body
  • Second candle
    • a doji candle
    • a doji body below the previous candle body
    • the high price above the previous candle low price
  • Third candle
    • white body
    • candle body above the previous candle body
    • the closing price above the midpoint of the first candle body

 

The Morning Doji Star is a bullish reversal pattern, being very similar to the Morning Star. The only difference is that the Morning Doji Star needs to have a doji candle (except the Four-Price Doji) on the second line. The doji candle (second line) should not be preceded by or followed by a price gap.

If a lower shadow of a doji candle would be placed below the first and the second line shadow we would deal with the Bullish Abandoned Baby pattern.

It happens that two first candles are forming the Bullish Doji Star pattern.

The pattern, as every other candlestick pattern, should be confirmed on the next candles by breaking out of the resistance zone or a trendline. If the occurrence is confirmed, then its third line may act as a support area. It also happens, however, that the pattern is merely a short pause prior further price decrease.

 

Figure 2.

Figure 2. It so happens, that a cumulation of candlestick patterns predicting the same direction does not necessarily makes the signal stronger. The market context in which a pattern appears plays the most important factor.
On the chart we can see a Morning Doji Star pattern, which is formed within a support zone created by a Long White Candle almost 4 months earlier. There is a resistance zone above the Morning Doji Star formed by a Long Black Candle, and this is at this moment the biggest threat for the bulls.
The Morning Doji Star is followed by a series of white candles, which eventually form a Three White Soldiers pattern. However, the market still is within the resistance zone made by the Long Black Candle. The bulls have the ball, and they are pushing price higher forming a Rising Window pattern. Moreover this move was performed at a very high trading volume, and the resistance zone is broken.
Then the bears are trying to gain control but without success.

 

Figure 3.

Figure 3. Another example presenting that the market context is crucial while analysing a candlestick pattern appearance.
A Falling Window, which second line is formed by a Long Black Candle at a high trading volume acts as a very strong resistance area. In situations like this appearance of a bullish pattern should be considered with caution. Simply it very often happens that a bullish pattern stops the bears only for a while.
A Morning Doji Star stops price drop for a while, but eventually the bears quickly retake control of the stock.

 

Morning Doji Star statistics

Below you can find some Morning Doji Star pattern statistics calculated by CandleScanner software.

Pattern name: Morning Doji Star
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Morning Doji Star): 365
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Morning Doji Star): 0.06 %
Average frequency: 6,127.2
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 79 83 65 138
% of
Occurrences
0.00 % 21.64 % 22.74 % 17.81 % 37.81 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 74 67 53 171
% of
Occurrences
0.00 % 20.27 % 18.36 % 14.52 % 46.85 %

 

10 Top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
ADBE 2 2,517.0 1 50.00 % 2 100.00 %
AMZN 2 2,280.5 2 100.00 % 2 100.00 %
APA 2 2,517.0 1 50.00 % 2 100.00 %
ARG 2 2,517.0 0 0.00 % 2 100.00 %
AZO 2 2,517.0 2 100.00 % 2 100.00 %
BEN 2 2,517.0 1 50.00 % 2 100.00 %
BWA 2 2,517.0 2 100.00 % 2 100.00 %
CBS 2 2,517.0 1 50.00 % 2 100.00 %
EA 2 2,517.0 1 50.00 % 2 100.00 %
ED 2 2,517.0 1 50.00 % 2 100.00 %

 

10 Top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
AAPL 2 2,517.0 2 100.00 % 2 100.00 %
GGP 2 2,517.0 2 100.00 % 2 100.00 %
SWKS 2 2,517.0 2 100.00 % 2 100.00 %
WMB 2 2,517.0 2 100.00 % 2 100.00 %
ALTR 2 2,517.0 1 50.00 % 1 50.00 %
AON 2 2,517.0 1 50.00 % 1 50.00 %
CSC 2 2,517.0 1 50.00 % 1 50.00 %
CTXS 2 2,461.5 1 50.00 % 1 50.00 %
DLTR 2 2,517.0 1 50.00 % 1 50.00 %
DNB 2 1,859.0 1 50.00 % 1 50.00 %
Pattern name: Morning Doji Star
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Morning Doji Star): 136
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Morning Doji Star): 0.08 %
Average frequency: 4,515.0
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 28 39 27 42
% of
Occurrences
0.00 % 20.59 % 28.68 % 19.85 % 30.88 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 24 32 21 59
% of
Occurrences
0.00 % 17.65 % 23.53 % 15.44 % 43.38 %

 

10 Top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
ARG 2 629.0 0 0.00 % 2 100.00 %
PCP 2 629.0 1 50.00 % 2 100.00 %
CAH 2 629.0 1 50.00 % 1 50.00 %
CNX 2 629.0 1 50.00 % 1 50.00 %
DAL 2 629.0 0 0.00 % 1 50.00 %
ETN 2 629.0 1 50.00 % 1 50.00 %
IR 2 629.0 1 50.00 % 1 50.00 %
JEC 2 629.0 1 50.00 % 1 50.00 %
PCAR 2 629.0 1 50.00 % 1 50.00 %
TGT 2 629.0 0 0.00 % 1 50.00 %

 

10 Top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
JEC 2 629.0 1 50.00 % 1 50.00 %
TSO 2 629.0 1 50.00 % 1 50.00 %
ARG 2 629.0 0 0.00 % 0 0.00 %
BRK.B 2 629.0 0 0.00 % 0 0.00 %
CAH 2 629.0 1 50.00 % 0 0.00 %
CNX 2 629.0 0 0.00 % 0 0.00 %
DAL 2 629.0 0 0.00 % 0 0.00 %
EMR 2 629.0 0 0.00 % 0 0.00 %
ETN 2 629.0 0 0.00 % 0 0.00 %
IR 2 629.0 0 0.00 % 0 0.00 %

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