Glossary · Candlestick & Chart Patterns
Hammer
A candle with a long lower wick, often appearing after a decline.
A hammer has a small body near the top of the range and a long lower wick (typically at least twice the body). It shows sellers drove price down during the period, but buyers pushed it back up by the close.
Hammers are most interesting after a decline, where they can mark a potential bullish rejection of lower prices. Confirmation — such as a strong follow-through up day — matters more than the hammer shape alone.
Example
A stock falls from $30 to $24 over two weeks. A hammer then prints with a low at $22.80 and a close near $24.20, suggesting buyers defended that selloff.