Inverted Hammer and Shooting Star Japanese Candlestick Pattern

The inverted hammer looks like an upside down version of the hammer candlestick pattern. The inverted hammer is found in a downtrend and usually signaling a reversal in the current trend. When it appears in an uptrend is called a shooting star.

The long upper wick of the candlestick pattern indicates that the buyers drove prices up but encountered selling pressure which drove prices back down to close near to where they opened

When encountering an Inverted Hammer or a Shooting Star, traders often check for a higher open and close on the next period to validate it as a bullish signal.

The Shooting Star looks exactly the same as the Inverted hammer, but instead of being found in a downtrend it is found in an uptrend and thus has different implications. Like the Inverted hammer it is made up of a candle with a small lower body, little or no lower wick, and a long upper wick that is at least two times the size of the lower body