A doji is a candlestick with no real body shaped like a cross. A doji indicates that the difference from the opening to the close was very minimal. In the case of momentum this quite often signals a trend reversal or at least an end to the current momentum.

 

1. Traders saw this as a sell opportunity and this continued for a while creating an downward momentum.

2. At a certain level there was no more sellers indicating the perception that this was no longer an attractive price. Sellers did not enter aggressively showing haste.

3. More aggressive traders may choose this as an entry point. Especially if this stock tried to reach the high of the day and did not. More conservative traders may wait for more confirmation of a trend change , such as a green candle with a full body, before entering.

4. If the major markets took a uptick at this moment there would be even greater probability of a upward trend as buyers will have more reason to enter and sellers will not be tempted to enter. These moments only happen for an instance you must be ready.