The Morning Star is a pattern that suggests the possibility of a reversal of the downtrend to the uptrend. Its name is derived for the morning star, which heralds the imminent rising of the sun, so the pattern predicts price growth.
The Morning Star pattern consists of a candle with a long black body (downward candlestick), followed by a gap and a candle with a small body (these two candlesticks form a simple pattern called the Star). After the Star, candle occurs upward candle that with its body covers a significant part of the first downward candle. This pattern indicates that buyers are gaining initiative.
During the formation of the first bearish candle, traders who are playing short are dominated. Then appears the candlestick with a small body. That means the sellers forces needed to continue moving downward are waning. The appearance of a strong white body proves that the Bulls begin to get the upper hand. Ideally, the Morning Star pattern includes price gaps before and after the body of the Star candle. In fact, the second gap is rare, but, in practice, its absence does not diminish the importance of this pattern.
Rare phenomenon of two Morning Stars in a row.