A Bullish Hammer is a single-candle reversal pattern

A Bullish Hammer is a single-candle reversal pattern that generally appears after a decline and indicates that sellers pushed the price sharply lower during the session, but buyers came back strongly and pushed the price near the opening level. 🔨 Structure of a Bullish Hammer A valid hammer generally has: Small real body near the upper end of the candle. Long lower shadow/wick, ideally at least 2 times the size of the body. Very small or negligible upper wick. It can be green or red, although a green hammer often shows stronger buying pressure. Most importantly, it should appear after a downtrend or near a support zone. Simple structure: ┌───┐ │ │ ← Small body └───┘ │ │ │ │ ← Long lower wick │ What actually happens inside the candle? Suppose a stock opens at ₹500. During the session, heavy selling takes the price down to ₹470. This initially suggests that sellers are in control. But near ₹470, buyers enter aggressively. The price recovers and closes around ₹498. So although sellers managed to push the price ₹30 lower, they could not sustain those lower prices. Buyers absorbed the selling and brought the price back near the opening level. That is the real meaning of the hammer: “Lower prices were rejected by the market.” Why location is extremely important A hammer does not automatically mean a bullish reversal. For example: Hammer in the middle of a sideways market → relatively weak signal. Hammer after a strong fall + at major support → much more meaningful. The strongest setup is when the hammer forms around a combination of: Previous swing low Horizontal support Trendline support Moving average support Fibonacci support Demand zone Previous breakout zone Example Suppose Nifty falls from 25,000 → 24,600 and reaches an important support zone around 24,550–24,600.