The inverted hammer is a hammer flipped upside down: a small body at the bottom of the candle and a long wick pointing up. It looks exactly like a shooting star, but it shows up after a decline instead of a rally, and it’s read as bullish.
The logic is a little more of a stretch than the hammer’s. Buyers pushed the price well up during the day, sellers knocked it back down by the close, but the fact that buyers showed up at all after a selloff is taken as an early sign of a turn. Our scanner has logged 5,130 inverted hammers across 559 US stocks and ETFs over three years.
What it looks like
- A small body near the bottom of the day’s range.
- A long upper shadow, at least twice the body.
- Little or no lower shadow.
- A gap down. TA-Lib wants the body to sit below the previous day’s body.
The results
| After an inverted hammer | Cases | Higher 1 day later | Higher 5 days later | Higher 20 days later |
|---|---|---|---|---|
| Inverted hammer | 5,130 | 50.7% | 54.0% | 55.0% |
| Any day | 413,576 | 51.9% | 53.8% | 55.6% |
The day after is slightly weak, then the five-day number lands on the baseline. Nothing to see in the overall numbers.
Split by trend, there’s a surprise
| Before the inverted hammer | Cases | Higher 5 days later | Any day in the same spot |
|---|---|---|---|
| Fell more than 5% in 10 days | 1,017 | 55.3% | 54.0% |
| Moved less than 5% | 3,030 | 52.4% | 53.1% |
| Rose more than 5% | 993 | 57.4% | 53.7% |
After a selloff, where it’s supposed to work, it beat the baseline by about a point, well within the margin of error of three points. The bigger gap is after a rally: inverted hammers there were followed by more gains 57.4% of the time, almost four points above normal. That’s not what the pattern is supposed to mean, and with fewer than 1,000 cases it could still be chance. But it’s a good example of why I’d rather look at the data than the textbook.
Confirmation
Here’s another twist. When the day after the inverted hammer closed higher (the classic confirmation), the stock was up five days later 52.2% of the time, slightly worse than any up day (52.7%). When the next day closed lower, it was up 56.7% of the time, against 54.0% for any down day. So the version that “failed” its confirmation did better. Again, the samples are a couple of thousand each, so I wouldn’t build anything on it, but it doesn’t support the standard rule.
How I’d treat it
As one of the weakest signals in the set. If a stock I like prints an inverted hammer at support, I’d note it and wait for a stronger reason. If I wanted a bullish position anyway, a defined-risk trade like a bull call spread keeps the cost of being wrong small.
Recent inverted hammers
The scanner flagged 101 in October 2026, including GOOGL, BABA, CRWV and MAR on October 23. Today’s list is on the candlestick scanner, and every pattern is compared in Do Candlestick Patterns Work?
Data: daily prices for 559 US stocks and ETFs, October 2023 to October 2026, patterns detected by TA-Lib. Educational only, not financial advice.