#MATL, 35 34 characters
Z"42Gi:qi!+lGqE!/tYo-KM!*|QYoZ}X]( ###Explanation
This takes care of the reflections using the formula px = abs(t/nx-round(t/nx))*nx, where t is a time variable that increases in steps of 1, nx is the maximum size along the x direction and px is the x position. An analogous formula is used for the y coordinate.
A 2D char array of spaces is initially created, and then it is filled with character * at the computed x and y positions.