A morning star pattern is a three candle pattern. It is strictly a reversal pattern. It will be found only in downtrends. The first candle will always be a large red candle showing sellers are in control. The second candle can either be a doji or a hammer candle and it shows the battle between the sellers and buyers to gain control. The third candle is the most important because it determines who gained control. It is important to see this candle close at least 50% into the first red candle to confirm a reversal. The deeper the close into the red candle, the more significance the pattern will have. Additional relevance can be placed on this formation if there is an increase in volume on the reversal candle. This pattern can be found primarily off of support prices and have a tendency to form from 52 week lows. We will provide as many examples as we can to help you identify this pattern.