Shooting Star In Candlestick Reversal Pattern

  • A shooting star is just like a mirror image of a hammer candle.
  • First there should be a sustained up trend and then there has to be a gap up opening.
  • The bulls should push price higher in the initial part of the day.
  • Then, later in the day bears should take in the control of the stock and push prices down.
  • Eventually the closing price should be very close to the opening price, resulting in a candle with a small green or red body, a big upper shadow and a small or negligible lower shadow.
  • The upper shadow of the candle should be at least twice the length of the body.
  • Now a confirmation of the shooting star pattern comes if price moves below the low of the candle within next 2-3 candles.
  • On confirmation, a short trade should be taken with stop loss above the high of the high of the candle.
  • A shooting star pattern with a red body is considered slightly more bearish than one with a green body.
  • It is often observed that shooting star candlestick pattern acts as bearish reversal pattern and triggers a down move after an uptrend.

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