Morning Star
Quick Definition
A bullish three-candlestick reversal pattern featuring a large bearish candle, a small-bodied middle candle (the "star"), and a large bullish candle, signaling a bottom.
Key Takeaways
- Morning Star is a three-candle pattern: large bearish, small star, large bullish — signaling a bottom reversal.
- A Morning Doji Star (middle candle is a doji) is an even stronger signal of selling exhaustion.
- The third candle should close above the midpoint of the first candle for a valid pattern.
What Is Morning Star?
The Morning Star is a three-candlestick bullish reversal pattern that forms at the bottom of a downtrend. The first candle is a large bearish (red) candle confirming the existing downtrend. The second candle is a small-bodied candle (either color) that gaps down from the first candle's close — this is the "star" that represents indecision and potential exhaustion of selling pressure. The third candle is a large bullish (green) candle that closes well into the body of the first candle (ideally above its midpoint), confirming the reversal. The pattern tells a clear story: sellers are in control (candle 1), momentum stalls as neither buyers nor sellers dominate (candle 2), and buyers take over decisively (candle 3). A Morning Doji Star — where the middle candle is a doji — is considered an even stronger reversal signal. Volume ideally decreases on the star candle and increases on the third bullish candle. The pattern is most significant when it forms at a key support level, trendline, or after an extended decline.
Morning Star Example
- 1A textbook morning star formed at the $100 support level: a large red candle, a doji that gapped down to $98, then a large green candle closing at $104 — the reversal launched a 20% rally over six weeks.
- 2The morning star on the weekly chart was confirmed by a volume spike on the third candle that was 3× the average, lending high conviction to the bullish reversal signal.
Related Terms
Evening Star
A bearish three-candle reversal pattern consisting of a large bullish candle, a small-bodied candle that gaps up, and a large bearish candle that closes well into the first candle's body.
Doji
A candlestick pattern where the opening and closing prices are virtually equal, creating a cross-like shape that signals market indecision and a potential trend reversal.
Hammer
A bullish reversal candlestick pattern with a small body near the top and a long lower shadow, appearing at the bottom of downtrends.
Engulfing Pattern
A two-candle reversal pattern where the second candle's body completely engulfs the first, signaling a shift in momentum — bullish when it follows a downtrend, bearish after an uptrend.
Moving Average
A calculation that averages a security's price over a specific number of periods, smoothing price data to identify trends.
Relative Strength Index (RSI)
A momentum indicator measuring the speed and magnitude of price changes on a 0-100 scale, used to identify overbought or oversold conditions.
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