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Shooting Star Candle Stick Pattern
 

Implication

A Shooting Star indicates that the prior uptrend is about to end and may reverse to a downtrend or move sideways. This pattern is an indication of a financial instrument's SHORT-TERM outlook.

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Description

A Shooting Star forms when the Upper Shadow is longer than the Real Body and the Lower Shadow is small or non-existant. The Shooting Star is the same as an Inverted Hammer, only the Shooting Star appears at the end of an uptrend, whereas the Inverted Hammer appears at the end of a downtrend.

shooting star

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Criteria that Supports

The Real Body of the Shooting Star should "gap" away from the Real Body of the previous period. The greater the size of that gap the more important the Shooting Star. Measure the gap between the Real Bodies by taking the lower of the open or the close for the Shooting Star and comparing it to the higher of the open or close for the previous period. If the Shooting Star's lower value is greater than the previous period's higher value then a gap is present.

The Lower Shadow of the Shooting Star should be close to zero.

The Upper Shadow of the Shooting Star should be as large as possible. The larger the Upper Shadow, the more important the Shooting Star.