✍ The image illustrates a Hammer Candle model at a Support Level, which is one of the most important technical patterns in technical analysis. Here is the simplified report:
What do we see in the image?
The Hammer Candle model appears at a clear support level.
The candle is highlighted with a blue circle.
The candle has a long lower wick and a small body at the top.
After the hammer appears, the price started to rise significantly.
- What is the hammer pattern?
It is a reversal pattern that appears at the end of a downtrend.
It indicates price rejection of further decline and the beginning of a potential reversal to the upside.
It consists of:
- A small body (red or green).
- A long lower wick (2-3 times longer than the body).
- No upper wick or a very short upper wick.
- What is a support level?
- A horizontal line representing an area where the price often stops declining.
- When the price reaches this level and shows a reversal pattern (like the hammer), it increases the likelihood of the price bouncing upward.
- The significance of the image:
- The appearance of the hammer candle at a support level is considered a strong buy signal.
- Positive confirmation comes from the following candle that closed strongly upward (large green candle).
✍️ Advice for beginners:
If you see a hammer candle at support, wait for confirmation from the next candle before making a buying decision.