Understanding Candlesticks_10. Morning and Evening Star Patterns

Lesson 10: Morning and Evening Star Patterns

The morning star is a three candlestick bullish reversal signal. The first
candlestick is a long bearish one. The second is a small candle and is a perfect Doji,
representing indecision in the market. And the third is a long bullish candle that
closes above the midpoint of the first candle.

If this is a bullish reversal signal, we will only look for it in the down-trend. As
you can see, the first candle in this pattern is a bearish continuation. The second
candlestick shows that the bearish momentum is slowing down and only the third
candlestick is an actual reversal signal.
The signal gets stronger if the third candlestick is a bullish engulfing candle, meaning
it closes above the first candlestick’s opening price.

On the other side of the trend, we can find the opposite signal, known as the
evening star.

The first candlestick in the signal is a long bullish candle. The second candle is
small and represents indecision - and the third is the long bearish candle that closes
lower than the first candle’s midpoint.