As per the notes on the daily chart of V posted last night (first one below), the price action so far today is setting up for a potential evening star reversal pattern.  Of course, we are only about 1/2 way through the trading session so anything can happen before the close today.  However, since I am occupied with some non-trading issues today, I just wanted to share this in advance for anyone who might choose to act on the pattern if it looks like we’re going to get confirmation (a close under 158.18…the mid-point of Tuesday’s price range).  “Acting on” this bearish reversal candlestick pattern can mean different things to different traders or investors.  Someone long in V with embedded profits looking for an objective exit might choose to close their position or tighten up stops while an aggressive trader might look to establish a starter short position before the close today if the pattern looks to be confirmed.  I don’t put too much focus on candlestick reversal patterns by themselves but taken in light with the technical case presented last night, I figured that this might be something to monitor.

Note: One could debate whether or not yesterday’s candlestick was actually a doji or not (based on the size of the body in relation to the wick & tail, I would consider it one) but that would be moot. As you can see from notes on today’s updated chart, whether it was a doji or not does not change the net effect or spirit of the pattern (an Evening Doji Star vs. an Evening Star pattern).  Also keep in mind that the third candlestick (today) is not required to gap below the 2nd day’s candlestick.  As per candlesticker.com:

The first white body, while the market is in an uptrend, shows the continuing bullish nature of the market. Then a Doji appears showing the diminishing power of the longs. The strong black real body on the third day proves that bears have taken over. An ideal Bearish Evening Doji Star Pattern has a gap before and after the middle real body. The second gap is rare, but lack of it does not take away from the power of this formation.