Inverted Hammer
A single candle with a small body and a long upper wick after a decline — a potential bullish reversal that needs next-day confirmation.
An inverted hammer forms at the bottom of a downtrend: price rallies hard intraday, leaving a long upper shadow at least twice the body, but closes back near the open. It shows buyers tried to take control even though sellers pushed price back.
On its own it's only a hint — the bullish read needs a higher close the next session. It's the bottoming-reversal cousin of the shooting star, which has the same shape but appears after an uptrend.
How it has actually played out
- Inverted Hammer: across 7,577 signals on US stocks in the last 150 days, price was higher a week later 40.3% of the time (-4.6 pts vs. an ordinary session) and higher a month later 39.7% (-1.4 pts).
Measured from the signal-day close, no stops or costs, versus every session of the same stocks over the same window. A base rate, not a prediction.
On StockSetups
StockSetups treats candles like the inverted hammer as confirmations layered onto its chart-pattern setups, tagging each signal's candle bias rather than trading the candle alone.
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