Morning Star

A morning star is a candlestick charting pattern that traders consider a reliable signal of a bullish reversal -- it's a bullish reversal pattern. A long black candle, followed by a very short candle that gaps below the black candle (i.e. 1st gap), followed by a long white candle that gaps above the short candle (i.e. 2nd gap), characterize the morning star. Although the 2nd gap is not required for a morning star pattern to be valid, an ideal morning star pattern would typically have both gaps. In currency trading, however, given the 24-hour trading environment (i.e. day 1 closing price=day 2 opening price), the morning star pattern tends to manifest without any gaps. The short second candle in the morning star may either be white or black. A short candle suggests selling pressure is weakening and buying pressure has started to assert itself. The third candle of the morning star is considered confirmation of the reversal. Expert traders believe the morning star is most reliable when it occurs after a downtrend. The morning star pattern is very similar to the bullish abandoned baby which has a doji rather than a short candle as its second candle. The bearish counterpart of the morning star is the evening star.