Hammer candle

Definition

A candle with a small body near the top, little or no upper wick and a long lower wick, at least about twice the body's length, appearing after a decline.

The story

The long lower wick shows sellers pushed price well down during the period, but buyers pushed it most of the way back by the close. After a decline, some traders read that as buyers starting to step in. The same shape after a rise has a different name: a hanging man.

Why you'll see it

It's one of the classic shapes in candlestick chart education.

Connects to

We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms