Inverted Hammer Candlestick

The Inverted Hammer candlestick pattern is a bullish reversal pattern that typically forms at the bottom of a downtrend, indicating a potential reversal in trend. It resembles the Hammer pattern but with the shadows reversed.

Characteristics of an Inverted Hammer Candlestick

1. Shape: The Inverted Hammer has a small body at the lower end of the trading range with a long upper shadow (at least twice the length of the body). The lower shadow is either very small or nonexistent.
2. Color: The body of the Inverted Hammer can be either green (bullish) or red (bearish), but the color is less significant than the overall shape. A green body is often considered slightly more bullish.https://myntr.it/7AEE2JZ

Interpretation:

• Bullish Reversal Signal: The long upper shadow indicates that buyers tried to push the price higher during the trading session, but they were met with selling pressure that brought the price back down near the opening level. Despite this, the presence of buying pressure suggests that bulls may start gaining control, potentially leading to a reversal.

Example

if you see the above chart shows that the market began the day by gapping down. “Prices increased until encountering resistance and supply at the daily high.

Support Levels: The Inverted Hammer occurs near significant support levels on the price chart. These levels act as barriers where buyers are more likely to emerge and defend against further downward movement.

Note:- Please avoid trading based solely on candlestick patterns. Instead, confirm the candlestick signals with support and resistance levels, as these patterns are more reliable when they occur near key levels