Courtesy of MarketTamer
- The Morning Star candlestick pattern is the mirror image of the Evening Star except it is found at the bottom of a downtrend.
- The pattern consists of three candles with the first candle being a long and dark followed by a gap down to a doji or Spinning Top and finishing with a gap up to a long white candle.
- The second candle indicates indecision and the third and final candle in the formation confirms the bullish reversal.
- The confirmation candle (The third candle) is much more convincing if it closes at least half way into the first long dark candle.
- Increased volume on the second and third candle will also confirm that the sentiment is changing as the bulls take the upper hand.
- The Evening and Morning Star candlestick formations are in my opinion two of the strongest reversal patterns in technical analysis.
- The validity of the formation is strengthened when confirmed by other indicators such as support and resistance zones, trend lines, major moving averages and chart patterns.
Two Heavyweights Slug It Out
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