The Japanese candlestick, known as the "Inverted Hammer", is one of the patterns that appear on the charts and is considered one of the important technical signals in technical analysis.

Key points for explanation:

1. Definition of the Inverted Hammer:

It is a candle that usually appears after a downtrend at support levels, and indicates a possible reversal of the trend to an upside.

2. Description:

The candle consists of a small red or green body.

It has a very long upper shadow compared to the length of the lower shadow and body.

The length of the upper shadow is preferably twice the length of the candle body.

3. Expression of the pattern:

It reflects that buyers pushed the price up during the session, but sellers returned the price to close near the opening.

It indicates that the downward momentum may weaken, and the possibility of the market rising is possible.

4. Expectation:

If the candle is followed by an uptrend in the next session and prices close above the upper shadow, it is a confirmation of a reversal of the trend to an upside.

5. Importance of the chart:

The attached chart shows the appearance of the inverted hammer pattern in the "Microsoft" stock in 2002 and how it was followed by a price rise after the appearance of the candle.

Conclusion:

The inverted hammer pattern is a potential signal of a market recovery after a downtrend, but it requires confirmation with a subsequent bullish session.