Inverted Hammer
A single-candle reversal pattern that forms after a decline, with a small body and a long upper wick. It shows buyers trying to lift price within the candle. Even though the attempt does not hold until the close, it can suggest that selling pressure is starting to ease.
How it forms
- It follows a clear decline. The same shape after a rise has a different name and meaning.
- The upper wick is at least twice the length of the body.
- The lower wick is absent or very short: no more than about a tenth of the candle's full range (high to low).
- The body is small and sits in the lower third of the range. Its colour does not change the rule; a green body is considered slightly stronger.
An inverted hammer is considered to need more confirmation than a hammer. The usual approach is to look for the next candle to close above its body.
What it suggests
After the open, buyers carry price clearly higher. Towards the close, sellers push it back near the opening level. Even so, the candle closes without making a new low.
In a downtrend, buyers often put up no resistance at all. An inverted hammer can show the first serious attempt to push higher. Whether the attempt works is decided by the candles that follow, so on its own it should be read as a weak hint.
When it strengthens, when it weakens
Strengthens
- Forming at a support zone
- A clear decline before the pattern
- The next candle closing above the inverted hammer's body
- High volume
- Forming on a higher timeframe (4H, 1D)
Weakens
- Forming in a flat, directionless market
- A noticeable lower wick
- The upper wick being rejected at a resistance zone just above
- The next candle heading back towards the low
- Forming on very low timeframes (1m, 5m)
The MarketLevelMap view
How it relates to zones
Two levels of an inverted hammer are read against zones. The body and the low show where price stopped. If they sit inside or just above a support zone, the decline can be seen as slowing at a known area.
The tip of the upper wick shows where the buyers' attempt was turned back. It often touches the nearest resistance zone or a support that broke earlier. If the wick hit a resistance zone and fell back, there may be little room for a recovery. Later candles closing above that zone are considered a stronger sign that the attempt has worked.
When it is invalidated
If price closes below the inverted hammer's lowest point, the bullish scenario is considered invalid. It means the decline is carrying on where it left off.
If the inverted hammer formed at a support zone, a close below the zone means the same. Price drifting sideways at the body's level for a long time without confirmation can also show that the signal has lost its weight.
Often confused with
For general information only. Not investment advice.Last updated: