The Inverted Hammer is a single-candle pattern that appears at the bottom of a downtrend. It has a small real body at the lower end of the candle's range, a long upper shadow (2x+ the body), and little to no lower shadow — the mirror image of a Shooting Star in a bearish context.
Buyers attempt to push price sharply higher intraday (the long upper wick) but sellers initially reject it — price falls back near the open. However, the attempt shows that buyers are testing the downside level with real aggression. A bullish confirmation the next day validates the shift.
Lower standalone confidence than the standard Hammer — confirmation is essential. When confirmed by a bullish candle next session, expect +2–7% over 5–10 days. Reliability jumps meaningfully when the pattern forms at a multi-touch support level.
Example Chart
Small body at bottom, long upper wick probing higher