Shooting star candlestick chart pattern is formed after an extended up move when the opening and closing price are at the low of the day and has a long upper shadow. The open and close should be as close as possible. There should be no or very small lower shadow. The colour of the small body doesn’t matter, but if it’s red then considered more bearish. This formation happens after a rally and usually a bearish reversal sign. If Shooting star is formed after a gap up opening then the significance of the formation increases. As usual its better to look for next day candle formation before making any trading decision, but some aggressive traders try STBT (Sell Today Buy Tomorrow) strategy.
Always keep in mind that shooting star needs to be formed after a long rally and need to have a gap up opening, to increase the probability of it becoming a bearish reversal pattern.Look out for shooting star candlestick chart pattern formation near congestion areas like resistance, breakouts, near congestion areas like important pivot points, Fibonacci levels and near critical moving averages like 21,34,63,50,100,200 etc. Formation near such areas increases the probability of reversal.