WS you are spot on mate + good try waverider2
The chart is of EVRAZ EOD daily & the green candle of the Morning Star cycle formed on 8th of march.
1. Its a powerful & optimal morning star
2. Its powerful & peculiar because the big red candle was followed by a gap down on open and it was then followed by a gap up before the big green candle which shows its strongly bullish. also green candle went all the way above the high of the red candle which shows the strength of the bulls. gap up + green candle engulfs/pierces previous 3 candles formed on 4-5-6th of march. its also backed up by volume which was more than average on the day of green candle. All this technically points to a forceful reversal.
3. Look for a morning star when the primary trend is rising. Then the morning star appears as part of a downward retrace of that uptrend. When an upward breakout occurs, price joins with the rising price trend already in existence.
Chart below shows primary uptrend by HHs & HLs with the current downward retrace which will probably end with a morning star.
Also as mentioned by Wavesurfer, its formed at a previous support as shown by the green line. A close below 250.50 on 7th of march (day of doji formation) would have meant its not a downward retrace in an uptrend & alarm bells would have started ringing!
4. There are many ways of trading this strong bullish signal. Most traders would plan on entering at the open of the next candle. But the length of the third candle has diluted the risk to reward potential on this trade. You can wait for a pullback to 50% of the big green candle but then you might miss the trade all-together! So I will divide the trade in four parts. I will open 2 parts on the open of the next candle on monday and I will place an order to buy other two parts at 50% of the green candle @262. My SL for all the four parts will be below the low of the doji @ 249.
I will post a follow up chart as go along and as I take up the trade on monday.
We will see how this classic morning star candlestick pattern pans out!
PS - I am a short term trader & I won't be hanging on this trade for too long - 5-7 days max & I can be in & out very quickly!