Morning Star
A three-candle bullish reversal: a long bearish candle, a small indecision candle gapping lower, then a large bullish candle recovering above the midpoint.
The Morning Star is one of the most reliable bullish reversal patterns. It needs three candles:
- Candle 1: A long bearish candle continuing the downtrend.
- Candle 2: A small body (Doji or Spinning Top) that gaps down — the "star." It signals indecision at a low point.
- Candle 3: A large bullish candle that closes above the midpoint of Candle 1's body, confirming the reversal.
The star (Candle 2) represents the market's turning point: sellers are spent, buyers are stepping in. Most reliable at a support zone or after a long downtrend.
On the desk
After a 20% correction, a Morning Star forms on the weekly chart at a major demand zone. The small star candle has gaps on both sides. The third candle is a large bullish close well inside the prior bearish candle — institutional buyers absorbed the selling.