Identifying the bearish inverted hammer

The bearish inverted hammer is depicted in Figure 8-10. The inverted hammer is actually the second day of the pattern. The setup day is a long white candle, which indicates a very bullish day. The start of the signal day (also called the hammer day) sees a gap opening and continued bullishness; that process carries on for part of the day, and higher prices are achieved. At some point during the signal day, the bears have had enough and selling begins. The bearish action pushes prices down below the opening price, and the close is equal to or very near the day's low.

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