A morning star is a visual pattern made up of a red candle, a smaller green/red candle with a short body (spinning top/doji) and long wicks, and a third tall green candle. BULLISH PATTERN
Similarly the evening star consists of a green candle, followed by a doji/spinning top and third red candle. BEARISH PATTERN
Ideally there should be a gap area between 2nd smaller candle with the 1st and 3rd candle which acts as resistance/support. And the 3rd candle should pierce atleast 50% of the 1st candle.
Examples: -
1. Very clear morning star formed on 4th October 2021 which signalled a massive rally.
2. Evening star formed on 16 Nov 2021 led to a massive fall. Not as clear cut with no gaps between candles.
3. Evening star with a massive bearish candle on 15 Dec 2022 led to a big fall.
Do check out the charts by zooming as it may not be clear
So should a bearish trade be taken? At this moment it is a big no as from all parameters NIfty is bullish at the moment. But looking at FII positioning and massive downward movement in S&P at the end there is a possibility if Nifty today closes below 18k and pierces through 50% of the 15th Feb green candle to below 17950 there could be fall as it would be a false breakout evidenced by low volumes.
This is yet to be confirmed though and Nifty has strong supports at 17860 and 17720.
Happy Trading and Best of Luck!!
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.
Similarly the evening star consists of a green candle, followed by a doji/spinning top and third red candle. BEARISH PATTERN
Ideally there should be a gap area between 2nd smaller candle with the 1st and 3rd candle which acts as resistance/support. And the 3rd candle should pierce atleast 50% of the 1st candle.
Examples: -
1. Very clear morning star formed on 4th October 2021 which signalled a massive rally.
2. Evening star formed on 16 Nov 2021 led to a massive fall. Not as clear cut with no gaps between candles.
3. Evening star with a massive bearish candle on 15 Dec 2022 led to a big fall.
Do check out the charts by zooming as it may not be clear
So should a bearish trade be taken? At this moment it is a big no as from all parameters NIfty is bullish at the moment. But looking at FII positioning and massive downward movement in S&P at the end there is a possibility if Nifty today closes below 18k and pierces through 50% of the 15th Feb green candle to below 17950 there could be fall as it would be a false breakout evidenced by low volumes.
This is yet to be confirmed though and Nifty has strong supports at 17860 and 17720.
Happy Trading and Best of Luck!!
Disclaimer - This is not trade recommendation or advice. This is purely for educational purposes. Do your own research before entering into a trade.