[Summary]
The morning star is a candlestick pattern that is said to indicate a bottoming out when it appears at the end of a declining market.
Generally, it consists of three lines: the Yin line, the small foot, and the Yang line.
This is a pattern to see if the selling momentum has weakened and buying has started to return.
What is the morning star?
The Morning Star consists of three candlesticks.
The flow is as follows.
- A big shadow line appears
- Small candlesticks appear and cause confusion
- A big positive line appears and buying returns.
There is a pause in the selling amidst the decline, and there are signs of a rebound.
Points to see
| Points to see | meaning |
|---|---|
| exit in the low price range | become a candidate for bottoming out |
| The third strong positive line | Strong repurchase power |
| Volume increases | Increases reliability of reversal |
| Bad material is exhausted | likely to lead to backlash |
Points to note
The morning star is a well-known bottoming pattern, but it doesn't necessarily mean a rebound.
If the downtrend is strong, even if it rebounds once, it may fall again. What appears to be a bottoming out may end up being a short break on the way down.
See if the value can be maintained after the third positive line. If it gets pushed back quickly the next day or later, I think there is still some selling left.
Summary
The morning star is a pattern that indicates that selling momentum may be weakening and buying may be starting to return.
By looking at the low price area, trading volume, and the next bar together, you will be able to determine the bottoming.