Hammer

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Hammer candlesticks form when prices moves significantly lower after the open, but rallies to close well above the intracandle low. The resulting candlestick looks like a square lollipop with a long stick. A hammer indicates that the market may be attempting to find a bottom, and that buyers are strengthening their position.

If this candlestick occurs after a significant uptrend, then it is called a Hanging Man. The body can be clear or filled in.

Image:hammer.gif
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