Inverted Hammer is one of the trend reversal Candlestick Technical Pattern. It consist of only one Candlestick. The body of the Inverted Hammer will be very small, it can be either in green or red in color. It will have longer upper shadow and very small or no lower shadow.
The Inverted Hammer normally occurs in the down trend. The reversal of Inverted Hammer is Shooting star wherein it will come in the up trend. It implies that there was selling pressure in the stock, but on one fine day the buyers are swiping out the sellers and forming strong bullish signal.
The potential possibility of trend reversal is too high, if the Inverted Hammer formed with up-normal volume or in support lines. The low of the Inverted Hammer can be consider as Stop loss for long positions.