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Hammer

A hammer shows lower rejection after weakness. Sellers pushed price down during the candle, but buyers brought it back up before the close, leaving a long lower wick and a small body near the high.

At A Glance

Name: Hammer
Category: Bullish Candle Patterns
Type: Bullish Reversal / Rejection
Number of candles: 1 candle
Typical context: After a pullback, selloff, or test into support.

How To Identify It

Body: Small body near the upper part of the candle range.
Wicks: Long lower wick with little or no upper wick.
Relationship: The single candle matters most after price has already been moving down or testing a lower area.

Start with the lower wick. The body should be small and near the high, showing price traded down first and then closed away from the low. Then check the location: the candle reads much better after weakness or into a support area than it does in the middle of a messy range.

Context

A hammer is most useful to study after selling pressure, near support, a prior low, VWAP, or another area where buyers may step in.

Hammer candle forming after a downward move near a lower support area.

The shape matters most when it appears after selling pressure, near support, a prior low, VWAP, or another area where buyers were already expected to defend price. In the middle of chop, the same shape may only show a temporary bounce inside noise.

What It Shows

A hammer shows that sellers had control early in the candle, but they could not keep price near the low. Buyers absorbed the push down and closed the candle near the upper part of its range.

What To Watch Next

Watch whether the next candles hold above the hammer body, reclaim the hammer high, or at least respect the hammer low.

The read weakens if price breaks back below the hammer low or cannot hold the upper part of the candle. That tells you the lower rejection did not turn into a defended area.

Common Confusion

The shape can look like a hanging man. The difference is context: hammer is discussed after weakness, hanging man after strength.

Key Takeaway

A hammer shows lower rejection after weakness. It becomes more useful when it forms near support and the next candles respect the hammer low or push back through the hammer high.