Japanese candlesticks - Morning star

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Morning Star



Definition: The morning star’s structure is made up of three Japanese candlesticks. The first is a large, solid, (red) bearish candlestick followed by a small bullish or bearish candlestick which closes below the first candlestick. The third candlestick is a large full bullish candlestick (green).

Illustration:

Morning Star
Characteristic: The morning star’s structure often forms after a significant drop characterized by several large, red Japanese candlesticks.

Significance: The morning star is a reversal pattern, it indicates a bullish trend reversal. The second candlestick reflects the inability of sellers to support the bearish movement, there is a lock of momentum and buyers eventually regain control.

Note: There are many variations in the second candlestick with this pattern. It can be separated from the other two (abandoned baby structure) or take the form of a doji (doji morning star). Regardless of the opening and closing levels, the important thing is that the candlestick’s body is small.

Doji Morning Star



Doji Morning Star
Invalidation: If the next candlestick is not bullish or does not open on a bullish gap, the morning star structure is invalidated.

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