Morning star pattern: does it mark a bottom?
A morning star is three candles after a fall: a big red candle, a small candle that shows the selling stalling, then a green candle that closes well into the first one. Sellers gave way and buyers took over.
When “Morning star” appeared, NIFTY 200 stocks were higher 12 trading days later 58.4% of the time, against 55.3% after any day: a small edge.
| After | Higher | Average move | Median move | Higher after any day |
|---|---|---|---|---|
| 5 trading days | 58.1% | +1.0% | +0.8% | 53.9% |
| 12 trading days | 58.4% | +1.4% | +1.4% | 55.3% |
| 20 trading days | 54.9% | +1.4% | +0.9% | 56.8% |
Year by year
| Year | Signals | Higher after 12 days | Any day |
|---|---|---|---|
| 2021 | 64 | 62.5% | 54.4% |
| 2022 | 105 | 55.2% | 52.1% |
| 2023 | 76 | 65.8% | 61.3% |
| 2024 | 96 | 55.2% | 53.7% |
| 2025 | 58 | 55.2% | 53.1% |
| Large cap only | 203 | 61.1% | |
| Mid cap only | 196 | 55.6% |
What it is
A morning star is three candles after a fall: a big red candle, a small candle that shows the selling stalling, then a green candle that closes well into the first one. Sellers gave way and buyers took over.
How we detected it
The first candle is red with a body at least 60% of its range and a range at least the average daily range of the 14 sessions ending three days earlier. The second has a body no more than 35% of the first body. The third is green and closes above the middle of the first body. Before the first candle, the close fell more than 2.5% over the 8 days before it. No gap is required. We count the third day.
How traders read it
It is one of the more complete reversal patterns because it shows the turn happening. Traders still look for the next days to hold above the small middle candle.
A signal is a probability, not a promise
Even the most reliable signal in this study was followed by the opposite move 37% of the time. A signal tilts the odds; it doesn’t decide the outcome.
Signals work better when they agree with the trend and with each other. Whatever the signal, decide your stop-loss before you act.
Practise spotting it, free
The Morning and evening star chapter teaches this signal in five minutes, then you call real NSE charts and get graded on your reasoning.
Common questions
Does the morning star signal work on Indian stocks?
When “Morning star” appeared, NIFTY 200 stocks were higher 12 trading days later 58.4% of the time, against 55.3% after any day: a small edge. No single signal is reliable on its own; traders combine it with the trend and manage risk with a stop-loss.
How often did stocks rise after this signal?
Across 399 signals on 154 NIFTY 200 stocks (2021–2025), the price was higher after 5, 12 and 20 trading days 58.1%, 58.4%, 54.9% of the time. After any day it was 53.9%, 55.3%, 56.8%.
How is “Morning star” defined here?
The first candle is red with a body at least 60% of its range and a range at least the average daily range of the 14 sessions ending three days earlier. The second has a body no more than 35% of the first body. The third is green and closes above the middle of the first body. Before the first candle, the close fell more than 2.5% over the 8 days before it. No gap is required. We count the third day.
How these numbers were made
We ran the same signal detector MarketSeekho uses to grade players over every trading day of 187 NIFTY 200 stocks, Jan 2021 to Oct 2025, using NSE end-of-day prices (1,54,833 stock-days). We counted the first day a signal appeared, then ignored the same signal on the same stock for 12 trading days so results don’t overlap. Windows with splits, bonuses or trading halts were left out.
“Any day” is the baseline: the same measure after every day in the data, signal or not. It matters because 2021–2025 was mostly a rising market, so stocks were higher after 12 days more often than not anyway. Past results don’t predict future ones, and this is not investment advice.