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Inverted Hammer

An inverted hammer shows an upside attempt after weakness. Buyers pushed price higher during the candle, but the close did not finish near the high, so the next candles matter a lot.

At A Glance

Name: Inverted Hammer
Category: Bullish Candle Patterns
Type: Possible Bullish Reversal / Rejection
Number of candles: 1 candle
Typical context: After a down move or near a lower support area.

How To Identify It

Body: Small body near the lower part of the range.
Wicks: Long upper wick with little or no lower wick.
Relationship: The single candle needs prior weakness to be read as an inverted hammer instead of an upper-rejection candle in strength.

Look for a small body near the lower part of the candle and a long upper wick. Then check the prior move. The candle is read as an inverted hammer when it forms after weakness, not after a clean run up.

Context

This candle is most useful to study after selling pressure, when the upper wick shows buyers tested higher prices from a lower area.

Inverted hammer candle forming after a downward move near a lower support area.

This candle matters most after a pullback, selloff, or test near support because it shows buyers finally tried to push back. In the middle of a range, the same upper wick can just be noise.

What It Shows

An inverted hammer shows that buyers tried to push price higher after a weak move, but they could not keep price near the high by the close. The next read is whether buyers can come back and accept price above that upper wick area.

What To Watch Next

Watch whether price can reclaim the upper wick area or build above the candle high. That is where the buyer attempt becomes easier to take seriously.

The read weakens if price stays below the body or continues lower without reclaiming the wick area. In that case, the upside test was rejected instead of accepted.

Common Confusion

The same shape can be called a shooting star after an up move. Context changes the label.

Key Takeaway

An inverted hammer shows buyers testing higher prices after weakness. The candle becomes more useful when later price action can reclaim and hold the upper-wick area.