Candlestick Psychology – Why ‘Hammer’ is a Powerful Reversal Signal

🕯 A Hammer forms when price drops significantly during the day but buyers push it back near the open, leaving a small body and a long lower shadow. 📈 It signals buying pressure and a potential reversal from downtrend to uptrend. ✅ Confirmation Rules: Appears after a clear downtrend Volume higher than average Next candle closes above hammer high 📌 Example: Stock falls from ₹180 to ₹170 intraday but closes at ₹179 with high volume → potential bullish reversal. 🧠 Always wait for next day confirmation before acting — single candle alone is not enough.