Inverted Hammer

The Inverted Hammer is a single-candlestick pattern that appears at the bottom of a downtrend and signals a potential bullish reversal. It features a small real body near the lower end of the trading range with a long upper shadow (at least twice the body length) and little or no lower shadow. The pattern resembles a shooting star flipped upside-down and indicates that buyers attempted to push prices higher during the session, creating the long upper shadow. Although sellers managed to push the close back near the open, the buying attempt itself is significant because it shows that bullish pressure is emerging after a decline. The inverted hammer requires strong bullish confirmation on the following session — ideally a gap up or strong green candle — because the pattern alone only suggests potential buying interest without proving it. The body color is secondary to the shape, though a green (bullish) body is considered slightly more positive. Volume confirmation on the following bullish candle strengthens the reversal signal.