Shooting Star

Definition:

A Shooting Star is a single bar bearish reversal pattern (regardless of real body color) developing after an up leg. A subsequent bar opens higher, trades much higher, but then returns to close near its open.

Background:

Conversely, if this candlestick is formed after a down leg where it opens lower, trades much higher, but then returns to close near its open, it is considered an Inverted Hammer.

Practical Use:

Technical analysts use Shooting Star candles as potential beginnings to short trades. Additional confirmation in the form of another longer term bearish trade setup is often needed.