Shooting Star

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The Shooting Star is a bearish reversal candlestick pattern that is formed after an upward price trend. The pattern is characterized by a small body (usually green or white) near the bottom of the candle with a long upper shadow that is at least two times the length of the body.

The long upper shadow indicates that the price of the security rose significantly during the time frame of the candle, but then declined to close near or below its opening price. This can be interpreted as a sign that sellers have stepped in and taken control of the market, potentially reversing the upward trend and indicating that a price decrease may be imminent.

A Shooting Star is a candlestick pattern that indicates a potential reversal of the current trend. It consists of a small body with a long upper shadow, and is typically seen after an extended uptrend or rally. The Shooting Star formation occurs when the open and close are near the low of the session, while the high of the day creates an unusually long upper shadow. This suggests that traders have pushed prices higher during the session but that sellers took control before closing, pushing prices back down to near their opening levels. As such, it can indicate that buyers may have become exhausted from driving prices higher, allowing sellers to take control. This is usually viewed as a bearish sign and can suggest further downside in price is likely for traders who enter into short positions after seeing this pattern form.

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