Friday, July 19, 2024

Morning Star

In this article, We learn about “Morning Star “.Let’s Go!

Morning Star is a bullish three candlestick pattern that indicates a potential bottom.

It warns of weakness in the downtrend, which could lead to a trend reversal.

The Morning Star consists of three candlesticks, with the middle candlestick forming a star.

The bullish reversal pattern consists of the following three candlesticks:

  • A long black candle, continuing the current downtrend
  • A short medium candle, gapping down at the opening
  • A long real body white candle that gapped higher at the open and closed above the midpoint of the first candle’s real body.

Stars can be bullish (empty) or bearish (filled) candles.

Morning Star

Accreditation standards

To identify the Morning Star, please note the following criteria:

  • Prices must be in a downtrend before the signal occurs.
  • The first candle must confirm the downtrend with a long black (or red) real body. This shows that the bears have firm control over the stock
  • The second candle must convey the state of indecision through a star candlestick (either color) or a doji.
  • This shows that supply and demand are equal and bears and bulls are fighting for control.
  • The third candle must be represented by a white (or green) candle with a closing price that is at least half of the first day’s black (or red) candle.
  • The last candle confirms that a reversal will occur.

meaning

The Morning Star candlestick pattern is the opposite of the Evening Star candlestick pattern, which is a top reversal signal that something bad is coming.

The first candle indicates that a downtrend is occurring and the bears are in control. However, after some tug-of-war and a period of uncertainty, the bulls managed to take over. You can expect the share price to rise accordingly.

For more information on this story of victory, note the characteristics of the Morning Star Candelabra. Look for the following signs:

  • The longer the candle, the greater the reversal force.
  • If there is a gap between the first and second candles (conveying a stronger sense of indecision), the likelihood of a reversal increases.
  • If there is a gap on both sides of the star candle, the probability of reversal is greater.
  • The higher the third candle’s white (or green) candle is relative to the first day’s black (or red) candle, the greater the strength of the reversal.

The extent to which the third candle’s real body pierces the first candle’s real body will enhance reliability, especially when the third candle has little or no upper shadow.

If volume data is available, reliability is also enhanced when the first candlestick has below-average volume and the third candlestick has above-average volume.

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