Bearish Gravestone Doji Candlestick

Bearish gravestone doji is a bearish top reversal pattern, which indicates the beginning of a new downtrend after a noticeable uptrend. This is a two candlestick pattern formed of a bullish (white or colorless) candlestick usually formed at top of an uptrend and a gravestone doji candlestick having (almost) same opening and closing prices and no (very small) lower shadow. Know more about different Doji candlestick patterns.


The requirements of a bearish gravestone doji candlestick formation include:

• The pattern should be formed at the top of a significant uptrend.
• The first day should be a bullish day with a long bullish candlestick preferably closing near the highest price for the day.
• The second day should open with a gap above (exception – forex charts) and should form a gravestone doji; having same opening and closing prices and now lower shadow.

Bearish gravestone doji pattern forms when bulls are unable to sustain the trend. Even though prices open above a gap on second day, bulls are unable to maintain their momentum and the increased bearish activity (at closing hours) causes the price to close at or around opening price. Gravestone doji is the name representing the graves of bulls that died defending their territory.

Bearish gravestone doji is a moderately reliable pattern. The reliability increases with increase in upper shadow of gravestone doji candlestick and with increase in gap between first and second day candlesticks. Confirmation of trend reversal is strongly recommended, which can be a lower opening, or a bearish candlestick on next trading day.

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