Improve Your Market Timing: The Inverted Hammer Candlestick Pattern

Courtesy of MarketTamer

The Inverted Hammer is a single session reversal pattern.
The Inverted Hammer appears at the bottom of a downtrend and is the inverse of a Hanging Man pattern which is located at the top of a trend.
The upper wick is ideally at least twice the length of the real body with little or no wick to the bottom.
The pattern is slightly more bullish if the real body is white as opposed to dark.
A gap down into the Inverted hammer increases the strength of the signal.
Many times you will see the Inverted Hammer associated and combined with other candles such as a Hammer and/or a Doji that will confirm and strengthen the reversal.
The relatively long wick to the upside begins to indicate to the bears that buying pressure is stepping in.
The bears will heed the notice and begin to cover their short positions even though they won the battle temporarily by pushing the stock lower.
The pattern is validated by a gap up to a bullish follow though session and is further fueled by more short covering.
Increased volume on the reversal day is also an indication the stock will be changing direction.