What it means
Inverted hammer: long upper wick (≥2x body), small body near the low, minimal lower wick — same geometric shape as shooting star but appearing at the BOTTOM of a downtrend. Interpretation: buyers attempted to push price up during the session and were rejected, but the close near the low at a downtrend bottom is interpreted as nascent bullish flow trying to take control.
Why it matters
Less reliable than hammer (~58% per Bulkowski with confirmation) because the close near the low is more ambiguous. Buyers tried and were rejected — that's the bearish reading. The bullish reading: at a downtrend bottom, ANY attempt to push higher is meaningful even if rejected.
How to use it
Require strong prior downtrend. Confirmation is essential: next candle MUST close above the inverted hammer's body. Without confirmation, fade rate is ~50%. Stop below the inverted hammer's low.
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