Bearish Shooting Star
This pattern consists of a white body followed by an Inverted Hammer that is characterized by a long upper shadow and a small body. It is similar in shape to the Bullish Inverted Hammer pattern but unlike it, the Shooting Star appears in an uptrend and signals a bearish reversal.
How to identify
- Price gap open to the upside.
- Small real body formed near the bottom of the price range.
- The upper shadow at least twice as long as the body.
- The lower shadow is small or nonexistent.
The long upper shadow and small real body at the bottom of the trading range are cause for concern by the bulls.
They wonder if this is the end of the uptrend and take measures to protect their gains.