Stock Market · Technical Analysis

Morning star & evening star

Three-candle reversal patterns

Morning and Evening Star are three-candle patterns, more reliable than single candles because they confirm a story over three sessions.

Morning Star, dawn after darkness

Appears after a downtrend. Three-candle setup:

1. Large bearish (red) candle. Sellers firmly in control

2. Small body candle (doji or spinning top). Gaps down, indecision appears

3. Large bullish (green) candle. Closes well into the first candle's body

> The small middle candle is the 'star'. It shows that selling momentum has paused. The third candle confirms buyers are back.

The ideal morning star: the star gaps away from both candles, and the third candle closes above the midpoint of the first candle.

Evening Star. The dusk before darkness

The bearish opposite. Appears after an uptrend:

1. Large bullish candle, buyers in control

2. Small body candle at the top. Gaps up, momentum fades

3. Large bearish candle. Closes well into the first candle's body

The star (candle 2) near the top signals buying exhaustion. The third candle confirms sellers have taken over.

Why these patterns matter

Three-candle patterns give you three data points of evidence. The indecision candle in the middle is the pivot. The market is processing a shift in sentiment. By candle 3, the new direction is confirmed.

3 candlesbetter evidence than 1, making these among the most reliable reversal signals

Volume tip

Highest reliability when: candle 1 has high volume (trend in full force), candle 2 has low volume (exhaustion), candle 3 surges in volume (new direction confirmed).

Takeaway. Morning Star after downtrend = bullish reversal. Evening Star after uptrend = bearish reversal. Three candles, one shift.