Make a wish because we’re moving on to the shooting star reversal pattern! You just gotta love these trading names. We definitely do!
Now, this is a one-candlestick reversal pattern at the end of an uptrend or a rally.
It consists of a small body of either color and a long upper shadow. The shadow is 2-3 times the size of the body, and there is no lower shadow or a very small one.
The bulls’ strength pulls the Shooting Star to open above the body of the previous candle creating a rising window.
Now as the uptrend is still in effect, the price surges but the buyers cannot maintain control.
Subsequently, the sellers step in, rejecting the high prices and forcing the close to be lower, near the open price of the session.
As the sentiment shifted to negative, it may as well be the end of the uptrend.
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