candlestick star Patterns
Star candlestick patterns have a small real body, representing indecision by both the bulls and the bears. This strength in direction of the trend is what makes the appearance of the candlestick star much more important. Let us read more about the Candlestick Charts Stars- Morning star, Evening Star and shooting star.
Morning starThe Morning star Candlestick comes after an extended downtrend, signaling a bottom reversal. This is a three-candlestick formation which signals a major bottom. Composed of a first long black body, a second small real body, white or black, gapping lower to form a star.
The black body in a falling market suggests that the bears are in command. The small real body appearing next implies the incapacity of sellers to drive the market The strong white body of third day exhibit that bulls have taken over.
Important points to remember while studying the Candlestick morning star are that the stars may be more than one, two or even three.The color of the star and its gaps are not important but the reliability of this pattern is very high. Still, confirm the form of a white candlestick with a higher close or a gap-up.
Evening starThe Evening Star candlestick is a major reversal pattern composed of three candlesticks. You will see the first candlestick as a long white body; followed by the second one, a small real body that may be white. Finally we see the black candlestick with a closing price. The first two candlesticks form a basic star pattern showing clearly that the market has turned bearish.
With the white body appearing in the Candlestick evening star the market is already in an uptrend suggesting the bullish nature of the market. The small body shows the diminishing capacity of the longs. The strong black real body of the third day proves that the bears have taken over.
As in the case of morning star, the important factors to note are that the stars may be more than one. The color of the star and its gaps are not important. Although the reliability of this pattern is very high, but one should still confirm in the form of a black candlestick.
Doji Starcandlestick doji star represents the star within the morning star and evening star. The formations are also known as the morning doji star and evening doji star. A doji star lacks a real body and has a strong significance after substantial advances or declines. The lack of direction that the Doji star candlestick communicates is a potent reversal signal.
The Doji Star is weaker than the morning and evening star, showing indecision. It requires confirmation from the next candlestick closing in the bottom half of the body of the first candlestick.
If we look at the psychology of candlestick Doji star, the first gap comes in an almost exhaustive fashion. This means that the stock was already in a strong uptrend or downtrend. The gap which closes right near its open ends the first sign that the directional pressure was fading. A more significant trend reversal is confirmed with the third candle gapping in the opposite direction.
The Shooting starThe Shooting star candlestick occurs after a strong uptrend. It has a long upper shadow with a small real body at the lower end of the candle. This pattern tells us that the markets rally could not be sustained. The market opened at or near its lows, shot up much higher and then reversed to close near the open.
When you study the Candlestick shooting star, the real body of the star adds confirmation to the validity of the impending reversal. Whenever a shooting star forms near a resistance level, it leads to a very powerful resistance level. Remember that the shooting star is a short term topping formation.