Just to make it simple to understand we can say that Bullish Morning Star Pattern is a reversal pattern pattern which becomes bullish after a bearish move in the stock or indices. It has a high reliability and it consists of 3 candles.
This is a three-candlestick formation that signals a major bottom. It is composed of a first long black body, a second small real body, white or black, gapping lower to form a star. These two candlesticks define a basic star pattern. The third is a white candlestick that closes well into the first session’s black real body. Third candlestick shows that the market turned bullish now.
We see the black body in a falling market suggesting that the bears are in command. Then a small real body appears implying the incapacity of sellers to drive the market lower. The strong white body of third day proves that bulls have taken over. An ideal Bullish Morning Star Pattern preferably has a gap before and after the middle candlestick. The second gap is rare, but lack of it does not take away from the power of this formation.
You can see Siemens forming the same pattern and one will be able to understand the same perfectly by following the stock for coming few days . If you are ready to trade than please read a caution which is to be exercised before executing the trade on the basis of this pattern.
Caution
As a caution, one must make sure that the trend is confirmed by another parameter despite its reliability being high.
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