Notices

Morning Star

From Traderpedia

The morning star candlestick formation is a bottom reversal pattern and occurs at the bottom of a downtrend. Just as with the Evening Star, the morning star is a three candlestick reversal pattern.

Image:Mornstar.jpg

The first candlestick to form is part of the downtrend and should be a long candlestick with a solid (dark) body. This comes as an assurance to the bears that they are still in control. It is the next candlestick that denotes change is in the air.

The second candlestick will be a 'star' - a candlestick with a small real body - or a Doji. This should gap open downwards from the close of the previous candle. Its small or non-existant body (as with a Doji) indicates a small price range.

The final candle to form in this formation will gap open upwards from the close of the Doji or 'star' and will have a clear (white) body which closes well into the body of the first candle.