As of 04/22/2024
Indus: 38,240 +253.58 +0.7%
Trans: 15,224 +140.68 +0.9%
Utils: 883 +7.72 +0.9%
Nasdaq: 15,451 +169.30 +1.1%
S&P 500: 5,011 +43.37 +0.9%
|
YTD
+1.5%
-4.2%
+0.2%
+2.9%
+5.0%
|
 39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 |
As of 04/22/2024
Indus: 38,240 +253.58 +0.7%
Trans: 15,224 +140.68 +0.9%
Utils: 883 +7.72 +0.9%
Nasdaq: 15,451 +169.30 +1.1%
S&P 500: 5,011 +43.37 +0.9%
|
YTD
+1.5%
-4.2%
+0.2%
+2.9%
+5.0%
| |
|
39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 | ||
My book,
Encyclopedia of Candlestick Charts
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The shooting star comes in two varieties: one and two candle lines. This page discusses the two line shooting star. The reason for the two patterns is that I found both described on websites, so I analyzed their behavior. The single line shooting star acts as a bearish reversal, but not the two line version. It acts as a bullish continuation pattern 61% of the time. Its overall performance is well down the list, ranking 52 out of 103 candlestick types where a rank of 1 means the best performance.
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Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 61% of the time
Frequency rank: 51
Overall performance rank: 52
Best percentage meeting price target: 52% (bull market, up breakout)
Best average move in 10 days: -4.93% (bear market, down breakout)
Best 10-day performance rank: 31 (bear market, down breakout)
All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |
 Shooting Star
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This version of the shooting star is a two line pattern. The first candle is a white day followed by a small bodied candle with a large upper shadow. The gap between the two candles suggests upward momentum is rampant, but the tall upper shadow -- at least three times the height of the body -- suggests the bulls could not hold onto their gains. The movement from a white candle to a second candle with a tall upper shadow and small body illustrates that momentum is fading. But that is not what happens in reality. The pause is just a momentary glitch along the way to a new high. The two line shooting star acts as a continuation of the existing price trend.
The overall performance rank is mid list at 52, where 1 is best out of 103 candlestick types. The best average move 10 days after the breakout is a decline of 4.93% in a bear market. That ranks just 31. A good performance would be a move of at least 6%.
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Upward |
| Configuration | Look for two candles in an upward price trend. The first candle is white followed by a small bodied candle with an upper shadow at least three times the height of the body. The candle has no lower shadow or a very small one and there is a gap between the prices of the two bodies. The second candle can be any color. |
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.
The figure shows a two-line version of the shooting star, circled in red. A white candle is the first line in the pattern followed by the star line. The body is small with a tall upper shadow and little or no lower shadow. A gap, which looks tiny in this case, exists between the bodies of the two candles. In this example, price breaks out upward when it closes above the top of the candle pattern.
This is a good example of a shooting star acting as a continuation of the existing price trend and not a reversal as candle theory suggests. With a continuation rate of 61%, that is not very far from random, but expect these types of setups to show a resumption of the price trend.
The numbers also suggest that the price trend after the breakout does not take price far. Thus, a trend reversal could be just days away.
-- Thomas Bulkowski
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