Inverted Hammer & Shooting Star Pattern

 

This pattern is opposite of Hammer pattern. It is a single candle pattern with no or a very little lower shadow.

The major feature of this pattern is the long upper shadow. Longer the upper shadow, stronger the pattern. Like Hammer pattern, the upper shadow should be at least 2 times of the body.

The color of this candlestick pattern is not very important.

The price went up after the opening but bears manage to strike back and evaporate all gains. If the close higher than the open, the color of the candle is green. If they close lower than the open, the color is red. Therefore, the color is not very important, size of the body is important. Lower the size of the body and higher the upper shadow, stronger the pattern.

When this pattern appears in the downtrend, it is known as Inverted Hammer.

 

When this pattern appears in uptrend, it is known as Shooting Star.

So, the Inverted Hammer is a bullish reversal pattern and the Shooting Star is a bearish reversal pattern.

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This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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