Morning Star

> A morning star is a candlestick pattern that consists of three candlesticks.
> A morning star is formed after a downward trend and signals the beginning of an upward movement of prices.
>It is a signal of a reversal in the prior price trend.
> Traders should analyze the formation of a morning star and then seek confirmation that a reversal is confirmed using technical indicators.


Key points

> Morning star pattern is formed at the bottom of a downtrend and it gives us a warning sign that the ongoing downtrend is going to reverse.
> Traders should analyze the formation of a morning star and then seek confirmation that a reversal is confirmed using technical indicators.
> Trading strategies using the Bollinger Band and Relative Strength Index.
> When a morning star is backed up by volume and other technical indicators like a support level, then it confirms the signal.


Trade tip
> Use the RSI or Bollinger band to find a entry at the right time frame.
> When using the  Bollinger bands, one should enter the trade when the morning is formed below the lower Bollinger band.
> From the daily chart of Nifty 50 above, we can how the RSI crosses 30 when the morning star is formed.

Evening Star

> The evening star is the opposite of a morning star.
> The evening star is a long bullish candle that is followed by a short bearish or bullish one and then a long bearish one.
> It indicates reversal to bearish trend whereas the morning star indicates reversal to the bullish trend.
As the Evening Star indicates that the uptrend is going to end, the appearance of it is a red flag to traders and gives a sign that it is time to book profits.


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