How to recognize it
- Appears after a decline.
- Small body in the upper part of the range. The body's color matters less than its position.
- Lower shadow at least twice the length of the body.
- Little or no upper shadow.
What it suggests
During the session, sellers pushed price well below the open. Buyers then absorbed the selling and drove the close back near the high. The long lower shadow is a record of lower prices that the market tried and rejected.
Where it matters
Strongest after a clear down-move and at a support zone, ideally with above-average volume. A hammer in the middle of a range is just a candle with a long tail.
Educational content only. Candlestick patterns describe past price action. They do not predict future prices, and they are not trading signals or investment advice. Prices in the diagrams are illustrative.