What is a morning star pattern?
The morning star also called the shooting star is a candlestick pattern that signals a potential rise on a given security. This pattern consists of 3 different days.
The first day is a down day. During this day the stock is experiencing a big sell off. The bears take charge. The second day however the bears are unable to push the stock down any lower. The bulls also are unable to push the stock higher.
The third day is a bullish rally. This signals that the bulls are taking charge of the stock. After this day the stock is projected to go upward. Below is an example of how a morning star pattern looks.
Another thing you want to remember is that the bullish rally should be bigger than the bearish crash in the beginning of the pattern. If the bullish rally is not bigger it may not be as powerful of a signal.
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