Morning Star

The Morning Star is a bullish reversal candlestick pattern that is used in technical analysis to signify the potential end of a downtrend and the start of an uptrend.

The bearish version of the Morning Star pattern is the Evening Star candlestick pattern.

Here's a breakdown of the Morning Star pattern:

  1. The pattern consists of three candlesticks. The first is a long red (or black) candlestick in a prevailing downtrend, indicating a clear bearish sentiment.

  2. The second candlestick is a small-bodied candle, often referred to as a "star," that gaps below the close of the first candlestick. This candle can be either red or green (black or white), and it represents indecision in the market.

  3. The third candlestick is a green (or white) candle that opens within the body of the second candle and closes above the midpoint of the body of the first candle, showing a change from the initial bearish sentiment to a bullish sentiment.

The Morning Star pattern indicates a potential shift from a bearish to a bullish market sentiment. The first candle shows the dominance of the bears. However, the second candle's presence indicates weakening selling pressure. The third candle, with its strong bullish close, confirms the market's shift towards the bulls.

Traders often seek additional confirmation (like a higher open and close on the next period) before acting on a Morning Star pattern. It's recommended to use this pattern in conjunction with other indicators or methods to increase the likelihood of successful trading. Remember, no pattern guarantees a certain market movement, but rather increases the probability of certain outcomes.

Last updated