Morning Star
The Morning Star is a bullish reversal pattern that is based on three candles – There is a gap between the first red large candlestick and the second small body candle {star}. The third large body moves/trades within the body of the first candlestick – A typical Morning Star has a gap before and after the second body
Evening Star
The Evening Star is the bearish counterpart of the Morning Star and appears during or after an uptrend – The star forms after a long white candlestick on the first day – The body of the star forms a gap with the body of the previous day – The first sign of uncertainty in the market is the formation of small-bodied stars – The next day a bearish gap is formed and the pattern closes with a lower price – Just like the Morning Star, the Evening Star must have a gap between the first and second bodies and between the second and third bodies
Formation of the Pattern
Downtrend The formation of a long red candle during the next day indicates a continuation of the downtrend. A bearish gap is formed at the opening of the next day’s session, trading in a short range and the session closes near the opening price. The next day’s trading begins with a bullish gap and the session ends at a higher price. A major trend change is indicated.
The formation of the Evening Star pattern is the opposite of the Morning Star situation.
Flexibility in the pattern
The Star pattern has two gaps – the first between the first candlestick and the star and the second between the star and the third candle – traders should be wary of the second gap.
If the closing price of the third candle is within the body of the first candle, a strong movement can be followed, especially if there is high trading volume on the third day – sometimes the closing price of the third day goes beyond the middle of the first candle.
Formation of the pattern
The Morning Star pattern is a Hummer or Paper Umbrella pattern I can form and this proves the bullish nature of the pattern/pattern.
The Evening Star pattern can form a Shooting Star pattern which can be taken as a bearish candlestick and proves the bearish nature of the pattern.
The following patterns are closest to the Morning and Evening Stars: Abandoned Baby, Morning Doji Star, Evening Doji Star and Three Star.
Morning Star
Evening Star
