What is Hammer / Inverted Hammer?
Small-bodied candles with one long wick: the hammer's wick points down (sellers pushed hard, buyers reclaimed everything); the inverted hammer's points up. Both read as bottoming signals after declines.
Formula
How to Interpret
A hammer shows a failed sell-off within a single session β price plunged, then was bought back to close near the highs. At the end of a downtrend, especially into support and on volume, it is one of the more reliable single-candle reversal prints. The inverted hammer is weaker and leans on next-day confirmation.
Typical Ranges
The identical shape after a RALLY is a different (bearish) pattern β position in the trend defines the meaning. Wick-to-body ratio conventions vary across implementations.
Find Stocks Using This Signal
Screen US and Indian stocks by Hammer / Inverted Hammer in the Technical Screener.