The Buyers made a final upward push but because they were losing momentum the Sellers reestablished control and pulled the price back to the lower trading range.
The Shooting Star is seen when the buyers attempt to push the price higher at the top of an uptrend. However, they were unable to because the buyers lost their momentum and the sellers took control.
With the Shooting Star, the price spikes upward and then drops back to the lower 1/3 of the trading range of the previous candle. (Stochastics will be in an overbought condition.)
Notice, in this case, the shooting star is also a bearish engulfing signal because it fully engulfs the trading range of the previous candle.
In the following example, the Shooting Star is followed by a Bearish Engulfing patter. The double signal is more powerful.
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This candlestick signal shows that the Buyers made a final upward push but because they were losing momentum the Sellers reestablished control and pulled the price back to the lower trading range. It can warn of an impending market reversal. This FREE Video will discuss how candlestick signals can help you pinpoint reversals.