"[1] Morning Star is a reversal candlestick pattern from a

bearish to a bullish market. It is formed [...]"

threader.app/thread/1100022975519088640

[1] Morning Star is a reversal candlestick pattern from a bearish to a bullish market. It is
formed after a downtrend when the market has hit bottom and signifies the start of an
uptrend.

[2] This pattern consists of 3 candlesticks. The first being a strong bearish whole body
candle, followed by a very thin body candle (called star here) and then followed by a
strong bullish candle. The important thing to note is the gap down between the first two
candles.

[3] A gap down essentially means that the opening of the star is lower than the closing of
the first. The star need not open below the lower wick of first candle but can exist
between the closing price and the lowest price of the first candle.

[4] A gap up is also seen between the star candle and the third candle which means the
opening price of the third candle was higher than the close of the previous one. It
reflects the enthusiasm of the buyers and shows that there is demand in the market.

[5] The first candle is formed due to pessimism in the market which leads to increase in
sales and drop in prices. The star in the pattern shows the indecisive between the bulls
and the bears, the weakness in the downtrend and tells the traders that the market has
hit bottom.
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[6] The star with a high upper wick is preferred as it shows that there is a high demand
for the stock. Additionally, the third candle which is at least 50% of the bearish candle is
preferred as it shows strength of the bulls to carry on the momentum further.

[7] High volume for the third bullish candle helps confirm the pattern. One should buy
the security once this pattern has been confirmed.
#MorningStar

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