Morning Star
A three-candle formation of a large falling candle, a small-bodied candle, then a large rising candle closing well into the first body.
How it is identified
Test: candle 1 falls strongly; candle 2 has a small body below it; candle 3 rises and closes above the midpoint of candle 1's body
Unit
qualitative
In depth
Three-candle formations impose more conditions and therefore occur less often, which makes each occurrence somewhat more distinctive and the historical sample smaller. The midpoint condition on the third candle is what separates a morning star from an ordinary bounce, and it is the condition most often waived in practice. Gaps between the candles are part of the classical definition but are rare in continuously traded markets, so most modern usage relaxes them. The entry states the definition and predicts nothing.
Worked example
Candle 1 falls from ₹528 to ₹494, a midpoint of ₹511. Candle 2 has a ₹3 body around ₹490. Candle 3 rises to close at ₹516, above the ₹511 midpoint — the condition is satisfied.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Morning Star” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.