Hammer
A single candle with a small body and a long lower wick, signaling that buyers rejected lower prices — a potential bullish reversal.
A hammer appears after a decline. Price sells off hard intraday, then buyers drive it back up to close near the open, leaving a long lower shadow at least twice the body. It shows sellers tried to push lower and failed.
A hammer is a clue, not a signal on its own — traders look for confirmation the next session (a higher close) and stronger context, like a hammer at a support level or the bottom of a pullback.
How it has actually played out
- Hammer: across 6,922 signals on US stocks in the last 150 days, price was higher a week later 42.8% of the time (-2.1 pts vs. an ordinary session) and higher a month later 41.8% (+0.7 pts).
Measured from the signal-day close, no stops or costs, versus every session of the same stocks over the same window. A base rate, not a prediction.
On StockSetups
StockSetups uses candlestick patterns like the hammer as confirmations on top of chart-pattern setups, tagging each signal's candle bias (bullish, bearish or neutral) rather than treating candles as standalone trades.
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