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The third bullish candle in this morning star pattern indicates?

a) Confirmation of a trend reversal
b) Potential continuation of the bearish trend
c) Market consolidation
d) Market uncertainty

1 Answer

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Final answer:

The third bullish candle in the Morning Star pattern indicates confirmation of a trend reversal.

Step-by-step explanation:

The third bullish candle in the Morning Star pattern indicates a) Confirmation of a trend reversal.

The Morning Star pattern is a reversal pattern that appears at the end of a downtrend. It consists of three candles: a long bearish candle, a small bullish or bearish gap, and a long bullish candle. The third bullish candle signifies the potential reversal of the bearish trend and the start of a new uptrend.

For example, if the first two candles in the pattern show a strong bearish sentiment in the market, the third bullish candle can indicate that buyers are entering the market and reversing the downtrend.

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