4th October 2011,Tuesday
HAMMER
HAMMER
HAMMER
If the above pattern occurs after a downtrend,it is referred to as HAMMER. Basically this is reversal pattern, and the scrip or index can go up after the formation of the pattern.
The body of this pattern is small and there is no upper shadow (high).It has only a long Lower Shadow (low).The more longer the shadow,the more the reliability of the pattern. Irrespective of the color of the candle,the Hammer pattern has significance and is a signal that the market may go up. Still,it has been observed that,the green hammer is a more confirm signal.
Usually,one will see this patterns formed at major market bottoms.
In the Given below Daily Chart of IDFC,a Hammer can be seen.
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