Inverted Hammer Candlestick Top

The day after an inverted hammer is detected usually tells whether prices will go lower or higher.

Inverted hammer candlestick top.

With a long upper shadow it may be a warning of a potential change in price. This pattern usually takes shape at the bottom of the downtrend signaling a potential upside reversal in the price. An inverted hammer candlestick pattern is typically found at the bottom of a down trending market. The pattern has one candle.

The open close and low are near the low of the pattern. In technical analysis the inverted hammer candlestick pattern is the reverse of the hammer pattern. The inverted hammer formation just like the shooting star formation is created when the open low and close are roughly the same price. The inverted hammer looks like an upside down version of the hammer candlestick pattern and when it appears in an uptrend is called a shooting star.

When the low and the open are the same a bullish inverted hammer candlestick is formed and it is considered a stronger bullish sign than when the low and close. An inverted hammer candlestick is usually found at the top of up trends or near resistance levels. The inverted hammer is a type of candlestick pattern found after a downtrend and is usually taken to be a trend reversal signal. The inverted hammer candlestick is a price formation that consists of a single candle with a long wick on its top.