Morning Star

Appearance: Tall black (red) body followed by a small body that gaps below the previous body.

Criteria: The small body must gap below the previous black (red) body (not necessarily the shadow). The color of the small body is irrelevant. It must be followed by a white (green) candle, the body of which moves well into the level of the first black (red) candle.

Effect: The small candle body means that the bears have failed to sustain the drive to lower prices and the downtrend has run out of steam. This is confirmed by a substantial increase in price the following bar.

Note: In candlestick descriptions, "white (green)" refers to an up-bar, and "black (red)" refers to a down-bar. Individual traders prefer different bar colors. For example, we personally trade with candles set to green for up and red for down. (TradeStation defaults their Candlesticks to this color convention.) Most related textbooks use white (or green, if color is used) for up and black (or red) for down.