Bearish Shooting Star
In an uptrend, the first day is a long blue candle continuing the established bull trend.
The second day is a candle (red or blue) with a real body at the lower end, a long upper wick and no (or almost no) lower wick.
Occurring in an uptrend the Shooting Star formation is indicative of a bearish change of momentum. Shooting Stars show that traders have tested the highs and settle the day near the open and low price. This suggests the rally is unsustainable and sellers are retaking the market.
Although this pattern is fairly weak, for those traders with existing longs in the market the Bearish Shooting Star serves as a signal for the deteriorating strength of their position.
Many traders will wait for a bearish move on the third day, forming a formation similar to the Evening Star three-candle pattern. If day three is a long red candle, that pattern combined with the shooting Star is a very strong reversal signal.
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