Morning Star / Evening Star

The morning star is a bullish reversal pattern that occurs at the bottom of a downtrend. As loke other candlestick patterns, it only signals a potential reversal.

This candlestick pattern consists of three consecutive candlesticks. Usually formed at the bottom of a downtrend, this prominently visible pattern tells you there’s a new morning to come after the downtrend. The Morning Star pattern can be treated as a Buy signal.

The first candle of this pattern is a large red candle, reminding us of the existing downtrend.

The second candle is a green candle that has a small body and formed the first red candle. It has long wicks and nearly looks like a star.

The third candle  is also a green candle that started with a gap-up opening and has a large body without almost no wick.

The evening star, on the other hand, has the same structure and it is also a reversal pattern. Unlike the morning star, the evening star occurs at the top of an uptrend and it signals a potential change in the price direction. The Evening Star pattern can be treated as a Sell signal.

The first candlestick is a solid bullish candle affirming bulls in control.The second candle is a small candlestick with a short body and does not touch the body of the first.The third candlestick is a large bearish candlestick that opens below the second candlestick and closes slightly near the lows of the first candlestick.