Inverted Hammer / 逆カラカサ・トンボ
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A single-candlestick pattern appearing at the bottom of a downtrend. Its shape is identical to the shooting star, with a small body at the bottom and an upper shadow at least twice the body length. Appearing during a downtrend changes its meaning, indicating that buyers are beginning to mount a counterattack. When the next candle confirms an advance, it signals the end of the downtrend and a potential upward reversal.
After the inverted hammer is confirmed, enter long when the next candle is bullish and exceeds the inverted hammer's high. Do not enter until a confirmation candle appears.
Project the upper shadow length upward from the high to determine the price target. Or target the nearest resistance line.
Place a stop-loss slightly below the inverted hammer's low.
High volume indicates buyer entry at the bottom. High volume on the confirmation candle further enhances reversal reliability.