Hammer Candlestick Pattern

Hammer candles can be recognized by two features, a real body at the upper end of the entire trading range, with little or no upper shadow and a lower shadow that is at least twice the length of the real body. The color of the real body is not important. Umbrellas can be either bullish or bearish depending on where they appear in a trend. If they occur during a downtrend, they are called hammers and are bullish, as in "the market is 'hammering out' a base." If an umbrella appears in an uptrend it's bearish, and is referred to as a hanging man. The latter's ominous name is derived from its look of a hanging man with dangling legs. [View Example]