Morning Star Candlestick Pattern

Morning Star candlestick patterns are categorized as bullish reversal candlestick patterns. These candlestick patterns tend to provide very strong support areas. Morning Doji Star candlestick patterns and Abandoned Baby Bottom candlestick patterns are special types of Morning Doji Star candlestick patterns, but these two candlesticks provide even stronger support than a normal Morning Star candlestick pattern.

All of these candlestick patterns consist of a series of 3 candlesticks that develop at the bottom of downtrends and signal a change for the stock's share price from a downtrend to an uptrend.

As a stock's share price continues its descent, the Bears appear to be in full control as the last candlestick was a bearish, long red candlestick (this is the 1st candlestick in a series of 3).

At the open of the next trading session, the Bears are feeling confident as the share price tends to gap-down from the 1st candlestick's real body and continue its descent through the early part of the trading period. But sometime before this trading period ends, the Bulls stage a rally and the share price starts rising again. Share prices tend to close below their highs by the end of the trading session, but the Bulls have definitely gained the upper hand (this is the 2nd candlestick in a series of 3).

A Morning Star candlestick pattern has completed development after the 3rd trading session ends. The Bulls continue their rally that started during the 2nd trading session. This buying rally causes a long green candlestick to develop by the end of the trading session. This 3rd candlestick then completes a Morning Star candlestick pattern.

Requirements

The following requirements are for Morning Star candlestick patterns. Any specific differences for Abandoned Baby Bottom candlesticks and Morning Doji Star candlesticks are noted.

• These candlestick patterns must develop at the bottom of an established downtrend
• Each of these candlestick patterns is made up of a group of 3 candlesticks
  • The 1st candlestick is a long, red bearish candlestick that tends to leave a medium-length lower shadow
  • The real body of the 2nd candlestick is quite a bit smaller than the 1st candlestick's real body and usually has a red colored real body
    • The 2nd candlestick opens lower than the 1st candlestick's real body - it is extremely important that the real bodies from the 1st & 2nd candlesticks do not touch
    • An Abandoned Baby Bottom candlestick pattern has a different 2nd candlestick - it has a Falling Window candlestick pattern (gap-down) develop between the 1st & 2nd candlesticks
  • The real body of the 3rd candlestick in the group is green colored
    • The 3rd candlestick pattern will start with a gap-up in the morning
    • The real body from the 3rd candlestick must penetrate high into the real body of the 1st candlestick
    • The real bodies of the 2nd and 3rd candlesticks should not touch either

Characteristics & Observations

Listed below are some of the other characteristics for Abandoned Baby Top candlestick patterns, Morning Star candlestick patterns and Morning Doji Star candlestick patterns, as well as some of my personal observations for them......

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