PATTERN: Reversal

TREND: Bullish

RELIABILITY: Low / Moderate


 How to identify it:
·  Small real body at the upper end of the trading range

·  Lower shadow at least twice as long as the real body

·  No (or almost no) upper shadow

What it Means:

There is a sharp sell off after the market opens during a downtrend. However, by the end of

the trading day, the market closes at or near its high for the day. This signifies a weakening

of the previous bearish sentiment, especially if the real body is white (the close is higher

than the open price). Since the certainty for a Hammer indicator is low, the trend reversal

can be confirmed by a higher open and an even higher close on the next trading day. If the

open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly

Doji has a higher reliability associated with it than a Hammer