Shooting stars on NDX and DJI

Weekly shooting star candles and gaps to watch on NASDAQ 100 (NDX) and the Dow Jones Industrial Average (DJI).

What is a shooting star?

A shooting star is a bearish candlestick pattern that forms after an advance and signals potential exhaustion of upside momentum or a possible reversal. It occurs when buyers push prices sharply higher during the period but fail to sustain those gains. By the close, sellers step in and drive the price back down near the open, revealing a rejection of higher prices and a lack of bullish conviction.

Like the Doji on the S&P 500 (see the prior blog post), a shooting star is a warning signal, not a confirmation of a trend reversal. Additional downside follow-through is needed to validate it as bearish

Mind the gaps on the NDX and DJI

So how do we manage risk following last week’s shooting stars? Watch the upside gaps.

• NDX: 25,656–24,418

• DJI: 47,347–47,326

A move below these weekly gaps—especially on a weekly closing basis—would confirm the shooting star patterns and suggest that last week’s gaps were exhaustion gaps, marking a potential shift in trend.

Note: Technology (XLK) and Semiconductors (SMH) have upside gaps similar to that on the NDX - see our Nov 3 The Sector Edge for more.

Chart 1: NASDAQ 100: Weekly candlestick chart

Chart 2: Dow Jones Industrial Average: Weekly candlestick chart