The main difference is that a Shooting Star appears in an uptrend, signaling a bearish reversal, whereas the Inverted Hammer is seen in downtrends, hinting at bullish potential. Both feature small bodies and long upper shadows but differ in their trend context.
Content:
- What Is Shooting Star In Stock Market?
- What Is an Inverted Hammer?
- Difference Between Shooting Star and Inverted Hammer
- Shooting Star Vs Inverted Hammer – Quick Summary
- Difference Between Shooting Star And Inverted Hammer – FAQs
What Is Shooting Star In Stock Market?
In the stock market, a Shooting Star is a bearish candlestick pattern signaling a potential price reversal. It appears during an uptrend and features a small lower body with a long upper shadow, indicating a struggle between buyers and sellers where sellers are gaining strength.
A Shooting Star in the stock market is identifiable by its small lower body and long upper shadow. This pattern forms when a security’s price rises significantly but closes near its opening price.
It signals that buyers initially pushed the price up, but sellers eventually drove it down, creating uncertainty. This pattern often precedes a downward shift in the market, indicating that bearish sentiment may be taking over.
For Example: If a stock is in an uptrend, opening at Rs 100 and rallying to Rs 120, but closing near the opening price at Rs 102. This forms a Shooting Star, suggesting a potential reversal from the uptrend.
What Is an Inverted Hammer?
An Inverted Hammer is a bullish candlestick pattern occurring at the end of a downtrend. It features a small lower body and a long upper shadow, suggesting that despite selling pressure, buyers attempted to push the price up, potentially signaling a trend reversal.
The Inverted Hammer is recognized by its small body at the lower end and a long upper shadow. This pattern indicates a trading session where buyers were able to push prices up, but not maintain them.
Despite the price closing near its opening, the Inverted Hammer’s formation after a downtrend hints at growing buying pressure. It suggests that the market could be shifting from bearish to bullish, signaling a potential upward trend reversal.
For Example: Imagine a stock in a downtrend opens at Rs 100 and falls to Rs 95, but then rallies to a high of Rs 110 before closing near the opening price. This forms an Inverted Hammer, indicating a potential bullish reversal.
Difference Between Shooting Star and Inverted Hammer
The main difference between a Shooting Star and an Inverted Hammer is that the Shooting Star appears in an uptrend and signals a bearish reversal, while the Inverted Hammer occurs in a downtrend, indicating a potential bullish reversal. Their shapes are similar but contexts differ.
| Aspect | Shooting Star | Inverted Hammer |
| Position in Trend | Appears during an uptrend | Appears during a downtrend |
| Shape | Small lower body, long upper shadow | Small lower body, long upper shadow |
| Implication | Indicates a potential bearish reversal | Suggests a potential bullish reversal |
| Market Sentiment | Shows sellers overcoming buyers | Indicates buyers fighting back against sellers |
| Psychological Impact | Reflects seller dominance after a price increase | Signifies buyer dominance after a price decrease |
| Confirmation | Confirmed by a downward move following the pattern | Confirmed by an upward move following the pattern |
To understand the topic and get more information, please read the related stock market articles below.
Shooting Star Vs Inverted Hammer – Quick Summary
- The Shooting Star in the stock market is a bearish pattern indicating a potential reversal. Occurring in uptrends, it has a small lower body and long upper shadow, showing sellers gaining strength over buyers.
- The Inverted Hammer is a bullish candlestick pattern appearing at downtrend ends. It has a small lower body and long upper shadow, indicating buyers’ attempts to counter selling pressure, hinting at a potential upward trend reversal.
- The main difference is that the Shooting Star, occurring in uptrends, signals a bearish reversal, while the Inverted Hammer, appearing in downtrends, suggests a bullish reversal. Both have similar shapes but appear in contrasting market conditions.
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Difference Between Shooting Star And Inverted Hammer – FAQs
What Is The Difference Between a Shooting Star And an Inverted Hammer?
The main difference is that a Shooting Star appears during an uptrend signaling a bearish reversal, while an Inverted Hammer occurs in a downtrend, hinting at a potential bullish reversal.
What Are The Types Of Shooting Star Candlestick?
The types of Shooting Star candlesticks are primarily categorized by their size and position in a trend. They can vary in body length and shadow size but always appear during an uptrend, signaling a potential reversal.
Is The Shooting Star Bullish Or Bearish?
The Shooting Star is a bearish candlestick pattern. It signifies a potential reversal of an existing uptrend, indicating that the buyers are losing control to the sellers, often leading to a downward price movement.
What is an Inverted Hammer?
An Inverted Hammer is a bullish candlestick pattern occurring at the end of a downtrend. It features a small lower body and a long upper shadow, indicating a potential reversal to an upward trend.
How To Trade The Shooting Star Pattern?
To trade the Shooting Star pattern, wait for confirmation of a bearish reversal, like a subsequent red candle. Enter a short position after confirmation, set a stop loss above the Shooting Star’s high, and target downward price movement.
Is The Inverted Hammer Bullish Or Bearish?
The Inverted Hammer is a bullish candlestick pattern. It indicates potential for a bullish reversal, especially when it appears at the end of a downtrend, suggesting that buyers are starting to gain momentum against sellers.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, commodity and hence we bring you the important topics and areas that you should know:
