Company: Jet Airways an Airline Services Company
Chart Type: Candlestick Type
Morning star is an indicative trend reversal pattern to be analysed with consecutive 3 days price behaviour pattern. During successive down trend, a noticeable Doji or Doji like candle ( ‘+’ like pattern) appears at the end of trend. This can be Doji or candle with small body having almost equal shadows on either side demonstrating equal strength from both Demand and supply side. Two other candles on either side are also included in the analysis.
Enclosed chart depicts one such pattern:
*First candle (D1) has Bearish candle large in size supported by high volume demonstrating strong control at Demand Zone. Closing price of this candle is at very low level.
*Next candle (D2) opens price lower than previous days’(D1) closing price confirming continuance of Bearish control. The price moves up & down and finally settles down just above the opening price. Peak high & Low are at equidistance from the candle body. Here, both supply & demand are strong, but indecisive to further trend.
*Third candle (D3) price opens above the closing level of previous D2 candle and moves upward due to weakening selling pressure forming GREEN candle. In fact, a jump up is seen while opening price and manages to cover whole body of bearish candle (D1). This behaviour confirms Bulls regaining control and it is expected to continue in the same direction.
Since Star candle is the beginning of raising upward direction, it is called “Morning Star”.
Hi,
your observation is good.