A Morning Star is a pattern consisting of three candlesticks that are interpreted as bullish signs by technical analysts. Traders watch for the formation of a morning star and then seek confirmation that a reversal is indeed occurring using additional indicators.Morning star patterns are useful in determining when a trend is reversing. Morning stars form when a short-term price trend is in the bearish phase before reversing and forming the start of an upward climb. The pattern consists of three candlesticks: the first being a single body candle that forms at the close of a bearish trend; the second is formed by two medium-length bars, with each bar representing a different timeframe within which price has declined; and finally, the last candle completes its body in this sequence by overlapping the previous two (the end of one overlying another).In the financial sector, a morning star is a bullish pattern. A morning star pattern consists of three candles that appear in a sequence that indicates price reversal: a large downward trend, followed by an upward climb. There are five technical indicators used when interpreting an evening star and morning star formation with respect to specific securities.Diagram of Morning Star Pattern: -Morning stars are formed when a downward trend is followed by three candles that have a common pattern. Morning stars are formed after a downtrend has been in place for several days and then an upward price trend starts. Traders then look at the previous three candle patterns and see if there is an equal or similar grouping of candles used to create the morning star pattern.
