As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20
As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20

Bulkowski on the 2 Line Shooting Star Candle Pattern

 

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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-- Tom Bulkowski

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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.

Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

Shooting Star: Important Results

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.

The ideal shooting star candlestick
Shooting Star

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Shooting Star: Discussion

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%.

Shooting Star: Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternUpward
ConfigurationLook 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.

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Shooting Star: Three Trading Tidbits

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.

  1. Shooting stars that appear within a third of the yearly low perform best -- page 670.
  2. Shooting star candles within a third of the yearly high act as continuation patterns most often -- page 673.
  3. Volume gives performance clues -- page 673.

Shooting Star: Example

The shooting star candlestick on the daily scale

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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See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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