A bullish candlestick pattern that co
nsists of three candles that have demo
nstrated the following characteristics:
1. The first bar is a large red candlestick located within a defined downtrend.
2. The second bar is a small-bodied candle (either red or white) that closes below the first red bar.
3. The last bar is a large white candle that opens above the middle candle and closes near the center of the first bar's body.
As shown by the chart, this pattern is used by traders as an early indication that the downtrend is a
bout to reverse.
A morning star pattern can be useful in determining trend changes, particularly when used in co
njunction with other technical indicators. Many traders also use price oscillators such as the MACD and RSI to co
nfirm the reversal.