What is a Morning Star Pattern?

Understanding Morning Star Pattern

Morning Star is a three-candle bullish reversal pattern that appears at the bottom of downtrends, signaling potential trend exhaustion and upward reversal. The pattern consists of a large bearish candle, followed by a small-bodied candle or doji (the star) that gaps down, and finally a strong bullish candle that closes well into the first candle's body. The morning star suggests bears are losing control and bulls are gaining strength, hence the metaphor of morning breaking after a dark night.

Pattern Structure and Recognition

The first candle is a strong bearish move confirming the existing downtrend. The second candle opens with a gap down but closes near its open, forming a small real body that reflects market indecision—bears can't push further. The third candle opens higher and closes strongly into the first candle's range, demonstrating bullish conviction. Ideally, the third candle's close recovers more than 50% of the first candle's decline. Higher volume on the third candle strengthens the signal.

Confirmation and Context

Don't trade morning stars in isolation. The pattern gains significance when forming at key support levels, Fibonacci retracements, or previous swing lows. Look for bullish divergence in RSI or MACD as additional confirmation. The opposite pattern is the Evening Star, which signals bearish reversals at tops. Wait for the pattern to complete fully before entering—premature entry on the second candle carries higher failure risk.