A shooting star is a bearish reversal candle with a small body near the bottom and a long upper wick, usually at least twice the body’s length. It appears after a rally and shows that buyers pushed prices up but could not hold them.
During the session, the stock rises sharply, attracting late buyers. Then sellers step in and drag it back down to close near where it opened. The long upper wick marks that rejection. It is the opposite shape of a hammer, and the twin of the inverted hammer, which has the same look but appears after a fall.
A hypothetical example: a stock rallies from ₹1,050 to ₹1,200 over three weeks. One day it opens at ₹1,198, spikes to ₹1,240 and closes at ₹1,195. Everyone who bought above ₹1,200 that day is now holding a loss. If the next candle closes lower, the pattern gains strength.
Traders who act on it typically keep a stop-loss above the high of the wick. The pattern carries more weight near an earlier resistance level or a round number that has capped prices before.
A common mistake is shorting immediately in a strong uptrend. Strong stocks print shooting stars and keep going. Confirmation, location and volume matter more than the shape itself. We study such failed signals as closely as successful ones in our Technical Analysis course.