Inverted Hammer and Shooting Star Candlestick Patterns Explained
Introduction
The candlestick chart is a powerful tool in technical analysis. Among the single-candle reversal patterns, the Inverted Hammer and Shooting Star stand out. While they look similar, their meaning and market placement make all the difference.
.png "What is Inverted Hammer and Shooting Star Candlestick Patterns ?")
What is an Inverted Hammer Candlestick?
- Type: Bullish Reversal Pattern
- Appears in: Downtrend
- Structure: Small real body at the bottom, long upper shadow, little or no lower shadow
The Inverted Hammer signals that bulls attempted to push prices higher but met resistance. However, the close near the open price suggests that buyers are gaining control — a potential reversal signal after a downtrend.
Confirmation
Wait for the next candle to close above the Inverted Hammer's high to confirm the reversal.
What is a Shooting Star Candlestick?
- Type: Bearish Reversal Pattern
- Appears in: Uptrend
- Structure: Small real body at the bottom, long upper shadow, little or no lower shadow
The Shooting Star shows that bulls drove the price up, but sellers took over and pulled it down near the open price. This indicates weakening bullish momentum and a possible reversal to the downside.
Confirmation
A bearish confirmation occurs if the next candle closes below the Shooting Star’s low.
Chart Example: Inverted Hammer & Shooting Star
Below is a sample chart highlighting both the Inverted Hammer and Shooting Star patterns:
Chart Summary:
- Inverted Hammer: Seen at the bottom of a downtrend, signaling a possible bullish reversal.
- Shooting Star: Appears at the top of an uptrend, indicating a bearish reversal.
Key Differences
| Pattern | Trend | Signal |
|---|---|---|
| Inverted Hammer | Downtrend | Bullish Reversal |
| Shooting Star | Uptrend | Bearish Reversal |
Trading Tips
- Always wait for confirmation candle before acting.
- Use support/resistance zones for stronger setups.
- Combine with RSI, MACD, or volume analysis.
Final Words
The Inverted Hammer and Shooting Star patterns may look alike but tell very different stories based on trend direction. Learn to spot these formations, wait for confirmation, and trade with proper risk management to increase your chances of success.
Want to master candlestick trading? Explore our free educational posts on The Stock India and level up your stock market journey.
.png&description=What is Inverted Hammer and Shooting Star Candlestick Patterns ?){kind=link}