Bullish reversal

Inverted Hammer

A small body near the bottom of the range with a long upper wick, appearing after a decline — an early sign buyers are testing higher.

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Long upper wickBuyers test higher after a drop
How the pattern looks on a chart

What it is

Price rallied hard off the open then gave most of it back, but the fact it happened at the bottom of a downtrend suggests buyers are starting to probe upward.

What it signals

It is a potential bullish-reversal warning that needs confirmation: a strong bullish candle the next session turns the tentative test into a signal.

How to spot it

Small body in the lower third, upper wick at least twice the body, minimal lower wick, positioned after a down-move. Same shape as a shooting star but the location (after a drop) is what makes it bullish.

One caveat

Never trade a single candle in isolation. It only carries weight with context — location at a key level, the prevailing trend, and confirmation from the next candle or from volume. On its own it is a hint, not a signal.

Related terms

HammerShooting StarDojiTrend

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