The shooting star candlestick pattern is best used in confluence with other signals like overbought readings, key moving averages, or resistance zones. They are most meaningful and accurate when they occur at overbought areas like the 70 RSI or the 3rd deviation from the 20-day moving average. A shooting star that forms at an overhead Fibonacci level or key moving average can also show a bearish confluence. A shooting star that occurs at higher prices while the RSI is at a lower level than the previous high can show a bearish divergence between the price and the indicator
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How to spot resistance with the shooting star
The shooting star candlestick pattern is best used in confluence with other signals like overbought readings, key moving averages, or resistance zones. They are most meaningful and accurate when they occur at overbought areas like the 70 RSI or the 3rd deviation from the 20-day moving average. A shooting star that forms at an overhead Fibonacci level or key moving average can also show a bearish confluence. A shooting star that occurs at higher prices while the RSI is at a lower level than the previous high can show a bearish divergence between the price and the indicator