Hammer (Candlestick)

A single-candlestick reversal pattern characterized by a small real body at the top of the trading range and a long lower shadow at least twice the body's length. It appears after a downtrend and suggests that sellers drove the price sharply lower during the session, but buyers stepped in and pushed it back near the open. Japanese rice traders, who invented candlestick charting in the 18th century, considered the hammer one of the most reliable bullish reversal signals.