Hammer Reversal Bullish Pattern, page-8

For people who not sure whats being said.... !!!!

A hammer formation is a bullish formation that generally occurs at the end of a declining price trend. It is identified by its small real body at the higher side of the range. It can be either filled or open, a down day or an up day. The bottom tail should be at least twice the size of the real body and the upper tail should only be small, if it exists at all.


It's the length of the tail relative to the body that creates the signal. The tail could be viewed as a sign of rejection of lower prices and therefore a possible reversal of the trend. Taken alone it's not really a definitive signal and therefore it's a good idea to seek confirmation with some sort of an up day signal, the following day. The stronger the up day signal, the better. Volume can also be used to ascertain the probability of a turn around, in this case and increase in volume.