What does a morning star candlestick look like?

The pattern needs a decline before it; in the middle of a range, three candles reverse nothing. Read them as a story, as in the drawing at the top of this page.

Hypothetical daily chart: candle 1 opens at $55.60 and closes at $52.80, so the midpoint of its body is $54.20. The star opens at $52.20, trades down to $51.60 and closes at $52.65. Candle 3 closes at $55.00, above $54.20, and completes the pattern. The color of the star does not matter; its small body does.

  • Candle 1, long red: sellers are still in control and the decline continues.
  • Candle 2, the star: a small body below the first candle’s body. Neither side wins the period, and the selling stalls.
  • Candle 3, long green: buyers push the close above the midpoint of candle 1’s body, taking back more than half of the selling.

Morning star vs evening star: what is the difference?

The evening star is the same pattern turned upside down, as the drawing below shows. It forms after a rise: a long green candle, a small-bodied star higher up, then a long red candle that closes below the midpoint of the first green body. Buying ran dry at the star and sellers took over in the third candle.

Everything else mirrors too. A morning star matters most at support after a decline, an evening star at resistance after a rise. The morning star’s stop goes under the star’s low, the evening star’s stop above the star’s high.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn panels. Left, morning star: two falling candles, then a long red candle, a small star lower down and a long green candle closing above the dashed midpoint of the red body, circled, above a green support zone, followed by a green candle with a buy triangle (after a decline, at support). Right, evening star: two rising candles, then a long green candle, a small star higher up inside a red resistance zone and a long red candle closing below the dashed midpoint, circled, followed by a red candle with a sell triangle (after a rise, at resistance).

Does a morning star need a gap? Variants in stocks

Textbook definitions, which come from Japanese candlestick charting, want the star’s body to gap below the first body and the third candle to open back above the star, like the first panel below. In US stocks that version shows up mostly on daily charts, where the overnight break lets a stock open away from the prior close, often after news.

Intraday, each candle usually opens where the last one closed, so a strict gap rarely forms on a 5-minute chart. Most traders accept a star whose body simply sits at or below the first candle’s close, as in the middle panel. When the middle candle is a doji, the pattern is often called a morning doji star (third panel), and it reads the same way. The looser the definition, the more often the pattern appears, so judge it even more by where it forms.

Turn your phone sideways to read the drawing. Tap to close.

Three hand-drawn morning stars, each after a red candle. Gap: the star’s small body sits below both neighbouring bodies, with the gap highlighted (bodies gap apart: mostly daily charts). No gap: the star opens at the red candle’s close and sits at the low (star at the low: common intraday). Doji star: the middle candle is a doji (a doji in the middle).

Where does a morning star matter? Context and location

The same three candles mean a lot at one price and little at another. A morning star deserves attention when it ends a clear decline at a level other traders watch: a support zone, a prior swing low, a rising long-term moving average or, intraday, VWAP. In the middle of a range, or halfway down a steep decline with no level in sight, it is often only a pause.

Two more checks add weight. Volume on candle 3 above the stock’s average shows real buying, which relative volume measures. And the higher timeframe should not be in a strong downtrend: a morning star on a 15-minute chart against a falling daily trend is more likely a bounce than a reversal, as explained in multi-timeframe analysis.

How to trade a morning star: confirmation, entry, stop and target

The close of candle 3 above the midpoint completes the pattern, but many traders still wait for one more candle to close above candle 3’s high before buying. Waiting costs a slightly worse price and filters out some failures. Continuing the hypothetical from the top of the page:

  1. Confirmation: the next candle closes at $56.00, above candle 3’s high of $55.20.
  2. Entry: buy near $56.00 at that close.
  3. Stop: just under the star’s low of $51.60, at $51.30. That is $4.70 of risk per share; morning stars often need a wide stop.
  4. Target: the next resistance, say $65.40, $9.40 away, a 2:1 risk-reward ratio. If the nearest resistance sat at $58, the trade would offer too little.
  5. Size: risking $200 on the trade, $200 ÷ $4.70 = 42 shares. The position size calculator does this for you.

When does the morning star fail?

A morning star fails when price closes below the star’s low: the low that buyers defended has given way. In the right panel below, the pattern forms with no support beneath it, the next candle closes lower instead of confirming, and two candles later price closes under the star’s low. Whoever bought at the close of candle 3 takes the planned loss, or more on a gap; whoever waited for confirmation never entered.

The star itself is sometimes a hammer, and candles 2 and 3 sometimes form a bullish engulfing pattern, so the same warnings apply. The usual reasons it fails:

  • No level: a star in the middle of a decline is often just a pause before lower prices.
  • A weak third candle: a close that barely reaches the midpoint, on low volume, shows little buying.
  • Gaps: an overnight gap down can open below your stop, so the loss can exceed your plan.
  • A strong downtrend on the higher timeframe: bounces against it tend to be short.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn panels. Holds: a morning star at a green support zone, a confirmation candle with a buy triangle, then two more rising candles above a dashed red stop line (at support, then confirmed). Fails: the same three candles with no support zone, a candle that closes lower instead of confirming, then two red candles, the last closing below the star’s low through the dashed stop line, marked with a red cross and stop hit (a close below the star’s low).