StocksMarket | Metals | Investment | Trading
  • Blog
  • Blog Archives
    • Opinion 2nd
    • Opinion by Ravi Chandra
  • Tutorials
  • Videos
  • Connect With Us
  • About Us
  • Contact Us
  • Disclaimer
    • Copyright
    • Privacy Policy

A bullish technical analysis candlestick pattern - The Inverted Hammer

1/10/2014

0 Comments

 
Poster by: Neha Gupta
Inverted hammer candlestick pattern on 1 minute chart

Inverted Hammer

The Inverted hammer candlestick pattern is a bullish trend reversal pattern, but many believe it is not as strong as a traditional Hammer. But I think before drawing any conclusions about the strength of an inverted hammer candlestick pattern, one should learn thoroughly to read these types of candles.

Formation of the Candle

Lets us have a look at the formation of the inverted hammer, in an inverted hammer candlestick pattern upper shadow is twice the length of the body and the candlestick will have very small or no lower shadow.
Tehhnical analysis candlestick chart

Application of the pattern

An inverted hammer generally appears at the bottom of a trend. The color of the candle can be green or red, but according to general concepts a trend reversal is more promising if the candle is Green in color i.e the close of the candle is above the open. Although I have found that in many cases reversals indicated by red colored candles are also very successful. For a successfully working example you can refer to the chart below.
Inverted Hammer Technical Analysis Chart

Confirmation towards a bullish trend

An inverted hammer indicates that the previous downtrend is about to end and the market may reverse to an uptrend or move sideways. It is important that this candlestick is followed by a bullish confirmation. This is a very efficient candlestick pattern which works in almost every market and time-frame. If you wish to read more about time-frames you can refer to my previous blog post on "How to choose the right time-frames for trading/investing" here.
Chart with multiple example of Inverted Hammer technical analysis pattern
0 Comments



Leave a Reply.

    Enter your email address:

    Delivered by FeedBurner

    Tweets by @MarketLok
     Information on the Website does not constitute financial or investment advice & must not be used as a basis for making investment decisions.

    Archives

    February 2016
    April 2015
    March 2015
    October 2014
    September 2014
    August 2014

    Previous Blog Archives

    • Opinion Blog 1
    • Opinion Blog 2

    Categories

    All
    Candlesticks
    Futures
    Indian Stock Market
    Learning
    Nifty
    NSE
    Technical Analysis

    Subscribe in a reader

    RSS Feed

Powered by Create your own unique website with customizable templates.