UK Accounting Glossary
The Morning Doji Star candlestick formation is a three-day bullish reversal pattern.
The Morning Doji Star candlestick pattern starts during a downtrend. The downtrend continues with a large-bodied candlestick. The second day opens lower, trades in a small range, then closes at its open forming a Doji. The third day closes above the midpoint of the body of the first day.
The first candlestick body, while the market is in a downtrend, shows the continuing bearish nature of the market. Then a Doji appears showing the diminishing power of the shorts. There may be one, two or even three Doji. The strong bullish real body on the third day proves that bulls have taken over.
An ideal Morning Doji Star Pattern has a gap before and after the middle real body. The second gap is rare, but lack of it does not take away from the power of this formation. The reliability of this pattern is very high, but still, a confirmation in the form of a bullish candlestick with a higher close or a gap-up is suggested.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Morning Doji Star are sourced/syndicated and enhanced from:
This glossary post was last updated: 22nd March 2020.