A shooting star candlestick is a bearish reversal pattern that typically appears after an uptrend. It has a small real body (the thick part of the candle), which is at or near the bottom of its trading range, and its color is less important than its shape and position.
It has a long upper shadow (the thin line extending upwards from the real body) that is at least twice the length of the real body. This long upper shadow indicates that buyers pushed the price up significantly during the period, but sellers ultimately rejected the higher prices and pushed the price back down. Ideally, there is little to no lower shadow or wick.
While a shooting star on a daily chart can provide a valid signal, observing it on a weekly chart lends it greater weight and reliability as a potential indicator of a significant bearish reversal.
My publications on Saturdays consider longer than daily timeframes since they have more data points, a weekly or monthly candle encompasses in general five daily trading sessions (depending on holidays/weekend trading, or crypto/futures). This means it consolidates a much larger volume of price action and market sentiment into a single candle.
Shorter timeframes (like daily or intraday charts) are more susceptible to "noise" – random fluctuations, news-driven spikes, or algorithmic trading that might not reflect a fundamental shift in market sentiment. A pattern on a weekly chart filters out much of this noise, making the signal more robust.
When a shooting star forms on a weekly chart, it implies more conviction, since over an entire week, the market opened, attempted to push higher significantly, but was ultimately rejected by sellers, closing near the low of that week. This represents a stronger and more sustained rejection of higher prices by a broader range of market participants (institutional investors, long-term traders) than a rejection that occurs over just one day.
Case Study: SMH
The Semiconductor ETF (SMH) provides a perfect illustration of a shooting star candlestick on its weekly timeframe. The black arrows in the chart highlight this formation, which historically preceded declines towards the 20 or 40-week moving averages, and even deeper corrections, as witnessed in April. The overbought oscillator further reinforces the potential for a pullback.
The volume shelf, originating from $231.2, is expected to provide substantial support. Any support level situated within this green volume-at-price shelf is inherently stronger than those outside it, whether above or below.
On Friday, June 6th, I published the support and resistance levels for the week ahead including SMH in over 40 securities. In that analysis, $249 was identified as the level dictating bullish momentum if the price remained above it. The bullish targets, or layers, were set at $259.5, which caused a temporary rejection on Monday, and $266.3, which indeed acted as a firm ceiling for semiconductors. Consequently, the price retraced from that zone, printing a weekly bearish candle.
The levels for next week were updated on Friday again.
The price closed on Friday at $257, as highlighted with the black background on the right price scale in the chart below. This closing price is below the central weekly level for next week, which is $259 (bold and underlined). Therefore, if the price remains below this level, the shooting star formation gains further validation, and the next immediate target would be $253. While $255 might offer some monthly support, its proximity to Friday’s closing price is notable. Moreover, this weekly formation typically precedes deeper corrections, as indicated by the red-transparent arrows in the chart.
If SMH successfully recovers its $259 key level (as some shooting stars serve as early warnings followed by a final spike before the actual pullback), $262 becomes the next resistance zone or target to assess for a potential bearish reversal.
In general, the Semiconductor ETF has been presenting a series of lower highs since July 2024, when some semiconductors stocks peaked (Micron Technology (NASDAQ:MU), Advanced Micro Devices (NASDAQ:AMD)), and others set a notable high that has been slightly surpassed before falling again for a consolidation (NVDA, Texas Instruments (NASDAQ:TXN)). Only Broadcom (NASDAQ:AVGO) is setting fresh all time highs but also with a shooting star.
GOOG
Another example of a shooting star, in this case price found rejection at $176, a long term level that as of today is proving its strength, and considering how overbought is becoming the Stochastic oscillator, there are good chances to see a pullback.
That said, the bearish setup for GOOG is validated as long as the price stays below $177 next week, which is the central level updated, suggesting a descent towards $172. If Alphabet (NASDAQ:GOOGL) can re-establish itself above the $177.3 central weekly level, the price could target $181 before reversing.
It’s worth noting that similar shooting star candles were printed in November 2024 and January 2025, both presented bullish follow through for one and three weeks respectively, before notable pullbacks. (each security has its own “personality”, don’t take the 1-3 weeks as a rule for the SPX, TSLA, or other securities studied today).
AAPL
The weakness in Apple (NASDAQ:AAPL) is unparalleled; 2025 has presented a continuous downward trajectory, and over the last three months, a symmetric series of lower highs has been notably evident. Last week’s candle initially suggested some continuation, but $203, which served as the central level for the week that just ended, acted with precision as resistance.
The sequence of lower lows now strongly suggests that the $192 long-term level will be tested. As long as the price remains below $199.4 (the central level for next week), $192 is the immediate next destination.
The broader picture reveals $192 as an annual level, with the monthly levels showing $191 as a line to watch. Furthermore, the immediate bearish level for the week is $192.8. This confluence indicates two key points:
$192 represents a confluence zone of annual, monthly, and weekly levels, suggesting it may act as support. However, this must be proven by price action.
The weekly candle shows conviction, and $192 is very close to the latest price. If the $192 zone is breached, a major resistance level would be established, and the world’s third-largest company by market cap would continue to hinder the major indices from reaching all-time highs.
Conversely, if a Doji candle forms on Monday, or if an intra-week sell-off bounces and recovers $199.4, the price could then aim for $202.7. This is the monthly central level, which is currently acting as resistance and provides further reference for Apple’s bearish momentum.
The analysis with the same approach and target prices for SPX, VIX, NDX, DJI, IWM, PLTR, NFLX, TLT, BRKb, NVDA, TSLA, META, Bitcoin, AMZN, and MSFT can be found in my homepage
Disclaimer: This content is educational and not intended to be investment advice.
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