The Shooting Star candlestick is a particular type of spinning top candlestick pattern, and the physical attributes of this candlestick make it easy to spot in a candlestick chart.
For starters, it has a very long upper wick or shadow, which is usually two to three times the size of the candlestick's body formation. This represents the price of the stock opened during the period and went higher in a strong move. However, the candlestick body's size is smaller than an average candlestick and reflects the failure of the bull's price push to hold its ground, and in response, it fell back, ending the period slightly above where it started.
Finally, there is little to no lower wick or shadow, which means even though the bulls failed to retain much of the ground they moved during the period, the bears' counterattack had a minimal effect against the stock opening numbers; the bulls stood their ground.
Regardless of the candlestick's color, as it can be either black (red) or white (green), the candlestick's meaning as a bearish reversal signal remains the same. Below is an example image of a Shooting Star where the market closed up for the period.
A Shooting Star candlestick is a strong bearish reversal signal. However, the position of the candlestick in a candlestick chart is of utmost importance as it needs to be found after an upswing or upward trend to be considered a reversal signal. If you are currently in a long position trade, it is recommended you tighten your stops to lock in your profits and prepare for a drop in the security's price.
If you are looking for a short trade, you might want to keep your eyes on this stock’s activity in the next period to confirm a short sale.