Inverted Hammer Candlestick Top

The inverted hammer formation just like the shooting star formation is created when the open low and close are roughly the same price.

Inverted hammer candlestick top.

The open close and low are near the low of the pattern. The day after an inverted hammer is detected usually tells whether prices will go lower or higher. 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.

Also there is a long upper shadow which should be at least twice the length of the real body. An inverted hammer candlestick pattern is typically found at the bottom of a down trending market. The inverted hammer is a type of candlestick pattern found after a downtrend and is usually taken to be a trend reversal signal. In technical analysis the inverted hammer candlestick pattern is the reverse of the hammer pattern.

This usually means that the trend is about to reverse and either create a new downtrend temporary reversal or a minor pullback. An inverted hammer candlestick is usually found at the top of up trends or near resistance levels. This pattern usually takes shape at the bottom of the downtrend signaling a potential upside reversal in the price. The pattern has one candle.