Three Stars In The South

The Three Stars in the South is classified as a three-line bullish reversal pattern.

All its candles become progressively shorter and have black bodies, which indicates that a bearish momentum is weakening.

The name of the pattern may be a bit misleading, as we are not dealing with short star-like candles here. There are no price gaps between the candlestick lines.

The first line of the pattern appears as a long line with a long lower shadow that must be longer than the body. This means that the first line can be formed by the Hammer or Takuri Line pattern.

The second candle opens below the previous open price and closes below the previous close price. The low should be higher than the previous low.

The third line is a Black Marubozu candle. The candle fits the center line and appears as a short line. The latter condition has the greatest impact on the very low frequency, i.e. the pattern appears rarely on candlestick charts.