Candlestick
Inverted Hammer Pattern
Bullish Reversal - Potential Buy
Signal
The
Inverted Hammer and Shooting
Star patterns are part of a larger group of candlestick
patterns called the Umbrella Lines. The Umbrella line
candles include the Inverted Hammer,
the Hammer, the Shooting
Star and the Hangman.
This pattern group can form in either color (black or
white). This pattern group is one of the only pattern
types that is irrelevant of candle color. The other
pattern types that shares these conditions are the Doji
pattern group and the Doji Star pattern group.
The
Inverted Hammer and Shooting
Star patterns are the exact same candle formation.
What makes this type of candle an Inverted Hammer is
when this candle forms after a market down trend. Then
it is said that the market is attempting to hammer out
a bottom (like the Japanese did to create their copper
woks). Confirmation of the Inverted Hammer pattern will
generate a buy signal.
When
this type of candle is found after an up trend, it is
considered a Shooting Star because of it resemblance
of a shooting star in the night sky. Confirmation of
the Shooting Star pattern will generate a sell signal.
Notice:
Investors should continually watch for Dojis and the
Umbrella group of candles. These candle types will typically
precede a major market reversal. In fact, many investors
have told me these types of candles are some of the
most important candle types for investors to use.
CONTINUE
|