Shooting Star Candlestick: How to Identify It and How It Differs From an Inverted Hammer
A shooting star has a small body at the bottom of its range and a long upper wick, and it appears after an advance. Here's how to identify it, confirm it, and tell it apart from the inverted hammer.
The shooting star is a single-candle pattern that appears after an advance and is traditionally read as a possible bearish reversal signal. It has a small body near the bottom of the candle and a long upper wick, resembling a star with a tail streaking upward.
What a Shooting Star Looks Like
The standard definition:
- A small real body near the bottom of the day's range.
- A long upper wick, commonly at least twice the length of the body.
- Little or no lower wick.
- It appears after an uptrend or a rally.
The body can be green or red; a red body (close below open) is generally described as slightly more bearish.
The Story Behind the Shape
During the period, buyers pushed price sharply higher; the long upper wick shows how far it climbed. But sellers then took over and drove price back down to near the open, so it closed near the low. In words, the market tried higher prices and rejected them.
That's why a shooting star at the top of an advance is traditionally read as a sign that buying pressure may be running out. It describes what happened in one period; it doesn't say the advance is over.
Shooting Star vs. Inverted Hammer
The two are the same shape. What distinguishes them is where they appear:
| Shape | After an advance | After a decline |
|---|---|---|
| Small body at bottom, long upper wick | Shooting star (bearish reading) | Inverted hammer (bullish reading) |
The same pairing exists for the hammer and hanging man: identical candle, opposite traditional reading, depending on the preceding trend.
A gravestone doji is similar in appearance, but its open and close are at the very low and it has virtually no body.
Confirmation
As with other single-candle patterns, the standard advice is to wait for confirmation rather than act on the candle itself. A shooting star is usually considered more meaningful if:
- The next candle closes lower, ideally below the shooting star's body or low. This is the most common rule.
- Volume is elevated on the shooting star day.
- It forms at a recognizable resistance level.
- The prior advance was significant, not a one- or two-day bounce.
A Worked Example
A stock has risen for several weeks. On one day it opens at $50.00, spikes to $53.00, falls back and closes at $50.30. Its low was $49.80.
- Body: $0.30 (open $50.00 to close $50.30).
- Upper wick: $2.70 ($53.00 − $50.30), about nine times the body.
- Lower wick: $0.20 ($50.00 − $49.80), very small.
That's a shooting star. A trader following the standard approach would look for the next day to close below $50.00 before treating it as a reversal signal.
What the Evidence Says
Candlestick reversal patterns are widely taught, but research support is weak. A 2006 study of Dow Jones stocks by Marshall, Young, and Rose found little evidence that candlestick strategies produced a reliable profit, and other studies are mixed. See do chart patterns actually work.
Limits
- They occur often. Most shooting stars are not followed by a significant decline.
- Definitions vary. "At least twice the body" is a convention.
- One candle carries little information. It matters more as part of a broader picture of trend and levels.
- Time frame matters. A shooting star on a weekly chart describes a whole week; on a 5-minute chart, a few minutes. See timeframes.
- Strong trends overpower them. In a powerful uptrend, a shooting star can be followed by new highs.
For more candlestick patterns, see the candlestick glossary.
This article is for educational purposes only and is not investment advice.
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