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Key Takeaways
- A shooting star has a small real body near the low of the period, a long upper shadow, and little or no lower shadow.
- The same geometry is called a shooting star when it forms after an advance and an inverted hammer when it forms after a decline.
- Either body colour can meet the shape conditions; preceding trend distinguishes shooting star from inverted hammer.
- The worked candle has a $1.75 upper shadow, $0.10 body and $0.15 lower shadow.
- The next session’s $49.25 close below the $50.40 low confirms the pattern.
What is a shooting star candlestick?
A shooting star candlestick is a single candle with a small real body near the low, a long upper shadow and little or no lower shadow that appears after an advance. Buyers push price well above the open during the period, sellers drive it back near the low by the close, and the candle’s high and low become the reference levels for a bearish setup.
It is traditionally a bearish reversal pattern. The same geometry after a decline is called an inverted hammer. Either body colour can qualify; trend context distinguishes the names.
How to identify a shooting star: body and shadow rules
Body = |close − open|. Upper shadow = high − max(open, close). Lower shadow = min(open, close) − low.
This example requires a positive body, an upper shadow at least twice the body, a lower shadow at most 15% of the full range, and the entire body in the bottom third. The placement condition is (max(open, close) − low) / (high − low) ≤ 1/3.
When open equals close, the body is zero and the candle is a doji, which needs its own rules.
Formula
For body B > 0 and range R > 0, this example requires upper shadow ≥ 2B, lower shadow ≤ 15% of R and the entire body within the bottom third of R, after an advance.- Real body equals |close − open|, upper shadow equals high − max(open, close), and lower shadow equals min(open, close) − low.
- Bottom-third placement means (max(open, close) − low) / R ≤ 1/3. Use the positive-body rule before calculating upper shadow / B.
Shooting star candlestick example
A stock rallies for three sessions. On the fourth session it opens at $50.65, trades up to $52.40, dips to $50.40, and closes at $50.55.
- |$50.55 − $50.65| = $0.10 real body
- $52.40 − $50.65 = $1.75 upper shadow
- $50.55 − $50.40 = $0.15 lower shadow
- $1.75 / $0.10 = 17.5 upper-shadow-to-body ratio
The $1.75 upper shadow is 17.5 times the $0.10 body. The $0.15 lower shadow is 7.5% of the $2 range, and the entire body sits within its bottom third. The next session opens at $50.30 and closes at $49.25, below the $50.40 low, which confirms the reversal.
The first three candles close progressively higher at $48.80, $49.75 and $50.45. The shooting star then opens at $50.65, reaches $52.40, trades to $50.40 and closes at $50.55.
Its body is $0.10, upper shadow $1.75 and lower shadow $0.15. They add to the $2 range. The upper shadow is 17.5 body lengths; the body’s upper edge is only $0.25 above the low, within the bottom third.
Its body also sits above the previous $50.45 close, producing a body gap. The candle ranges overlap because the previous high is $50.60 and the shooting-star low is $50.40.
Shooting star confirmation rule
This setup requires the next session to close below $50.40. The following candle opens at $50.30 and closes at $49.25, meeting that rule.
The open at $50.30 already gaps below the low, and the close at $49.25 confirms it. Decide in advance which one triggers the entry: the open gets you in at $50.30, the close at $49.25.
How traders use the shooting star pattern
Locate the pattern at Support or Resistance. Mark the $52.40 high and $50.40 low. Specify entry, invalidation and target, then calculate position size from those prices.
Compare participation using Relative Volume over matching intervals. Align the chart timeframe with the intended holding period.
Carry the same levels into the contract: Options Flow shows whether puts hit the ask after the rejection, and the Options Profit Calculator prices each bearish structure at the chart target and at the $52.40 high.
Limitations of the shooting star pattern
- Require a prior advance and a close below the star’s low. Without the advance the shape carries no bearish reversal meaning, and the confirming close gives up part of the move to show sellers following through: at $49.25 it sits well below the star’s $50.55 close.
- Fix the chart interval and session before scanning. A shooting star on a daily chart does not always appear on an hourly chart, and extended-hours prices can change the candle.
- Fix your shape rules before you scan. This example uses an upper shadow of at least twice the body, a lower shadow of at most 15% of the range and the body in the bottom third; apply the same thresholds to every chart you compare.
- Keep the stop above the candle’s high. Inside a strong uptrend a shooting star can be followed by new highs, and that stop defines the planned loss.
Bottom line
A shooting star records a failed push higher after an advance, with the candle’s high as the invalidation level and its low as the trigger. Wait for the confirmation rule you chose, check the setup against resistance and relative volume, and size the trade from the distance to the high.
Clear answers
Frequently Asked Questions
Sources and Further Reading
- Fidelity: Identifying Chart Patterns (Technical Analysis)
- Fidelity: Identifying Chart Patterns Webinar Transcript
- Fidelity Learning Center: Investment Candles by Thomas Bulkowski (Stocks & Commodities)
How entries are sourced, calculated and updated: editorial methodology.