KLine Analysis Lesson 24: Inverted Hammer Line of Inverted Form

The inverted hammer line is an important form of determining whether the market is at a bottom. Similar to the "hammer line", this form usually appears in a downward trend, and its appearance indicates that the market trend may reverse.

Recognition Rule
1）  Previously, the market was in a downward trend;
2）  First rootKThe line is the longer, darker line of the entity, the second oneKThe line is in the form of an inverted hammer;
3）  TwoKThere is no requirement for a downward gap between the lines, as long as the second oneKA negative line is sufficient;
4）  Second rootKThe length of the upper influence of a line usually exceeds twice the length of the entity.

Psychological Analysis
On the first day, the market continued to decline due to inertia, and on the second day, after a low opening, a large number of buyers emerged in the market, driving prices not to mention an increase. However, the emergence of lockdown prices led to prices eventually falling back, and the final closing price was lower than the opening price, almost closing at the lowest price for the entire day. Similar to the previously lowered neckline, whether to reverse still needs to be determined by the shape of the third day. If the market opens at a price higher than the "inverted hammer line" entity on the third day, it indicates that the potential reversal possibility is causing bearish positions to turn, weakening bearish forces and strengthening multi-party forces. The inverted hammer line can easily evolve into a "bullish rising star" form on the second day, which we will discuss later.

Related Forms
None.

Practical Application

2018year12month28Suning Yigou(002024)After the inertial decline of the previous day, two extremely small backweights of the physical part were closed in succession (because the physical part was extremely small), and then on the the fourth day, the positive line was closed higher, and then the downward transfer moved into the upward trend.

***Risk statement***
KLine analysis is only an indicator tool used to judge the strength of buyers and sellers in the market and market sentiment. How to identify and study is subjective to some extent. It may not be correct to judge the future market. Many fundamental investors never analyzeKChoosing to hold high-quality individual stocks for a long time has also resulted in significant returns. Please evaluate for yourself whether and how to use itKLine tool.