The result should be as the next one:



Make a copy of the circle and try to make it smaller:



Next step includes choosing again the Custom Shape Tool (U) - Circle Thin Frame and representing a ring. After that we’ll select the Rectangle Tool (U) and press on the Alt button to cut out several vertical and horizontal stripes.



You have the Blending Options in these tables:

 

 



You must get the same result as in the picture below: