Business, Legal & Accounting Glossary
The Morning Star candlestick formation is a bullish reversal pattern.
The Morning Star continues a downtrend with a long candlestick body day followed by a gap-down small body day. The third day opens up with the open near the low for the day. The third day closes above the midpoint of the first day.
The Morning Star is similar to the Morning Doji Star except the middle candlestick has a small body instead of a Doji.
The first two candles of the Morning Star modestly suggest a loss of bearish momentum. In fact, up to day two, this formation matches the bullish Inverted Hammer weak-to-moderate strength reversal pattern. Bullish Inverted Hammers alone are good signals for reversal on day three, but the trend reversal should be confirmed by an upward candlestick the next day provided by the Morning Star.
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This glossary post was last updated: 22nd March, 2020 | 0 Views.