A small real body forms at the lower end of the trading range. The upper
shadow is usually no more than twice as long as the real body and there
is no or almost no lower shadow.
In a downtrend or during a pullback within an uptrend, the stock gaps
down. A valid attempt is made to rally the stock off the bottom, but the
strength subsides and the stock falls to close near the day’s low.
The rally attempt failed, but it does suggest that there are some bulls
out there looking to buy. For a reversal to occur a strong follow up day
is needed with solid volume.
The bullish Inverted Hammer is similar to the bearish Shooting Star, bullish
Gravestone Doji, and bearish Gravestone Doji and could become the middle
day of the bullish Morning Star.