Shooting Star

A Shooting star is a type of candlestick pattern in technical analysis that signals potential reversal in the market. It typically appears during an uptrend and suggests that the current upward momentum might be coming to an end.

To identify a shooting star candlestick, look for these key criteria:

• It must appear after a strong uptrend, as it signals a potential reversal at the top of the trend;
• The candlestick should have a small body, indicating that the open and close prices are close to each other;
• The upper shadow should be at least twice the length of the body, showing that prices moved significantly higher during the session before being driven back down;
• The lower shadow should either be nonexistent or very small, suggesting that the price didn’t dip much below the open or close.

When all these conditions are met, the shooting star pattern suggests that the uptrend may be losing momentum, and a potential bearish reversal could occur.