What is the morning star? Explaining candlestick patterns that indicate bottoming out

2024-01-19

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This content has been translated automatically by AI. Translation accuracy, nuances, and the author's original intent may not be fully reflected. In the event of any discrepancy, the original Japanese version shall prevail.

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[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.