Morning Star Candlestick

The Morning Star Candlestick pattern is a bullish reversal pattern that typically occurs at the end of a downtrend.

What does the Morning star candle pattern look like?

This pattern is composed of three candlesticks:

  1. The first candlestick is a long bearish (red or black) one, indicating strong selling pressure.
  2. The second candlestick is a small-bodied candle, known as a “star”, which can be either bullish (green) or bearish (red). This candle opens with a gap below the close of the previous candle, indicating that the downtrend might be losing steam.
  3. The third candlestick is a large bullish (green or white) one, opening above the close of the star and closing at least halfway into the body of the first candle. This shows a shift in sentiment and strong buying pressure.

What does this chart pattern suggest?

The Morning Star pattern signifies that the bears are losing control and bulls are ready to take over. It can be an indicator that a reversal from a downtrend to an uptrend might occur.

However, like all candle patterns, it should not be used in isolation. Traders should consider the longer-term market structure before making trading decisions based on this chart pattern.