Morning StarBack to Glossary
Just like the early morning star that heralds a new dawn, in technical analysis, the early morning star is a candlestick pattern signaling that the worst is over. Found at the bottom of a bear trend, the pattern is composed of a large down-candle followed by a small gap-down candle that can be bullish, bearish or neutral. These two candles are followed by a third long up-candle that gaps-up from the second candle. The formation indicates that selling pressure is waning and bulls are aggressively buying the dip.
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