Final answer:
The evening star pattern is the bearish version of the Morning Star pattern.
Step-by-step explanation:
The evening star pattern is a three-candlestick pattern that occurs at the top of an uptrend and signals a potential reversal in price. It consists of a large bullish candle, followed by a small-bodied candle, and finally a large bearish candle. This pattern is considered a bearish signal and suggests that the buying pressure is weakening and sellers may take control soon.
Example:
Let's say the stock XYZ has been in an uptrend for several days and the last candle is a large bullish candle. The next day, the stock opens higher but closes lower, forming a small-bodied candle.
Finally, on the third day, the stock opens lower and closes much lower, forming a large bearish candle. This three-candlestick pattern would be identified as the evening star pattern, which is the bearish version of the Morning Star pattern.