Morning Star and Evening Star
Three-candlestick reversal patterns: a morning star signals a bullish reversal at the bottom of a downtrend, while an evening star signals a bearish reversal at the top of an uptrend.
A morning star is a three-candlestick bullish reversal pattern forming after a downtrend: a long down candle, followed by a small-bodied candle that gaps lower (reflecting continued indecision), followed by a long up candle that closes well into the first candle's body, signaling that buyers have decisively regained control. An evening star is the mirror-image bearish counterpart, forming after an uptrend: a long up candle, a small-bodied indecision candle gapping higher, then a long down candle closing well into the first candle's body.
Both patterns are generally considered more significant when the middle, small-bodied candle shows a genuine gap away from the surrounding candles, and when the third candle's close reaches deep into the first candle's body rather than only barely overlapping it, since a deeper close reflects a more decisive reversal of the prior trend's momentum.
Examples
- A morning star pattern completing after a sustained downtrend, with its third candle closing deep into the first candle's body, is generally considered a strong bullish reversal signal.
- An evening star is the mirror-image bearish counterpart to a morning star, forming after an uptrend instead of a downtrend.