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  • Inverted Hammer Reversal Pattern

Definition:
A Inverted Hammer is a single candlestick (regardless of real body color) bullish reversal signal that develops after a down leg. It opens lower, then trades higher, but closes back near its open.


Background:
Conversely, if the candlestick is formed after an up leg where it opens higher, trades much higher, but then returns to close near its open, it is considered a Shooting Star.

Practical Use:
Technical analysts use Inverted Hammers as a potential buy signal. Additional confirmation is often needed in the form of another longer term bullish trade setup if needed.

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