Shooting Star

The Shooting Star candlestick signals a bearish reversal when it occurs in an uptrend. Note that in an downtrend, the same pattern is bullish and called an Inverted Hammer.

Shooting Star

The Shooting Star candlestick signals a bearish reversal when it occurs in an uptrend. Note that in an downtrend, the same pattern is bullish and called an Inverted Hammer.

 


Shooting Star Identification

The day opens higher and the stock price continues to trend higher. But then the stock price retreats and closes near its open.  The candlestick looks like an inverted lollipop.  

Shooting Star candlestick


Interpretation of Shooting Star

In a market characterized by uptrend, bulls are able to move the price up briefly, but cannot sustain the trend. The Shooting Star can be a warning for bulls to anticipate a further, more sustainable decline.  The reversal trend is confirmed by bearish moves the next day.  The day after the Shooting Star occurs, the lower the candle falls below the previous body, the more likely the longs will cover their positions, leading to the weakening of a bullish market.  Many sellers will enter the market once that occurs, leading to a bearish reversal.  Confirmation is highly recommended for the Shooting Star.

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