A small body near the low with a long upper shadow appearing after a decline, read as a tentative bottoming signal.
Shape identical to a shooting-star, but it occurs after a fall rather than a rally. The interpretation is that buyers made a serious attempt higher for the first time in the decline, and although sellers pushed it back, the attempt itself is new information.
Because the candle closes near its low, an inverted hammer on its own looks bearish. It is one of the clearest cases where confirmation is not optional: most traders require the following candle to close above the inverted hammer's body or high.
Frequency is moderate and reliability is mediocre. It is best treated as a signal to start watching a name for a change-of-character, not as a standalone entry.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The parts of a candlestick. One candle sums up a slice of time: the thick real body runs from the opening price to the closing price, and the thin wicks reach out to the highest and lowest prices traded. Colour tells you which way the body ran.
Educational only, not advice. Spotted an error? Post in Site Feedback.