Hammer Reversal
A hammer is a single-session reversal candle: price sells off hard during the session but closes back near the high, leaving a long lower wick and a small body. After a decline, it shows buyers rejecting lower prices decisively.
- Bias
- Bullish
- Category
- Candlestick Reversal
- Scan cadence
- Every close
What has to be true for a Hammer Reversal to trigger
- A long lower wick, substantially longer than the body
- A small real body positioned near the top of the range
- Little or no upper wick
- A preceding decline, since a hammer in an uptrend is a different signal
How PatternGrade grades it
A longer lower wick relative to the body, a smaller body, a minimal upper wick, and a clearer preceding decline all raise the grade.
Every scanner grades its hits A+, A or B from the pattern's own measurable structure. The grading is deterministic — the same chart always produces the same grade. It describes how closely the chart matches the pattern, not how likely anything is to happen; no hit rate or probability is attached to a grade. The reasoning is set out in the methodology.
What a Hammer Reversal looks like in practice
After a five-session decline, a stock opens at $47.20, sells off to $44.10 during the day, then recovers to close at $46.90. The lower wick is nearly three points, the real body is barely thirty cents, and there is almost no upper wick. Volume is roughly double the previous session's. The bar sits at the low of a two-week slide, near a level that held twice before.
How a Hammer Reversal fails
The next session takes out the hammer's low. A hammer is a one-day rejection, and one day of rejection is easily overwhelmed. The pattern needs follow-through to mean anything, and a large fraction of hammers get undercut within a session or two. The pattern also fires constantly in the middle of downtrends, where every bounce produces a long lower wick, so hammers without a tested support level beneath them carry little information.
What this pattern is telling you
Single-candle patterns are the weakest class of signal on their own. A hammer at well-defined support is meaningful; a hammer in open air is mostly noise.
PatternGrade is not a financial advisor and does not give buy or sell recommendations. Targets and stops shown on a pattern are reference levels derived from its geometry, not advice.
How to scan for Hammer Reversal setups
PatternGrade rescans every liquid US stock (~4,500 names) for this pattern after every close and returns the hits as a graded list, with the pattern drawn on each chart, so you review setups rather than hunt for them.
Join the waitlist to be invited when sign-ups reopen and see the current Hammer Reversal list, or browse all 75 patterns.
Hammer Reversal FAQ
What does a hammer candlestick mean?
Price sold off during the session but closed back near the high, leaving a long lower wick. Buyers rejected lower prices. After a decline, it is read as a potential bullish reversal.
How reliable is a hammer candlestick?
On its own, not very. It carries much more weight when it forms at a well-defined support level or the low of an established base, which is what the grade weighs.
What makes a valid hammer?
A lower wick at least twice the length of the real body, little or no upper wick, and above all a preceding decline. The same shape after an advance is a hanging man and is read the other way. PatternGrade requires the downtrend context before returning a hammer.
Does the hammer's body colour matter?
A close above the open is marginally stronger, since it means buyers finished the session in control, but the wick is what carries the information. Both colours are conventionally accepted as hammers.
Does a hammer need confirmation?
In practice, yes. A single-session rejection is weak evidence, and the conventional approach is to wait for the next session to close above the hammer's high. PatternGrade reports the bar when it forms and draws the low as the structural invalidation; whether to wait is your decision.
Where do hammers work best?
At a level that already mattered, such as a prior low, a rising moving average or the bottom of a base, and after an extended rather than a shallow decline. A hammer in mid-air, at no particular level, is the weakest version and grades accordingly.
Patterns a Hammer Reversal is mistaken for
- Dragonfly Doji
- A dragonfly doji has essentially no real body at all: open and close are the same. A hammer has a small but real body. The doji is the more extreme version of the same shape.
- Hanging Man
- Identical shape, opposite context: a hanging man appears after an advance rather than a decline, and is read bearishly. Location is the entire difference.
- Piercing Line
- A piercing line is a two-candle pattern requiring a specific close relative to the prior body. A hammer is a single session.
- Selling Climax
- A selling climax is a multi-session capitulation event on extreme volume. A hammer is one bar and requires no volume extreme, though the strongest hammers have one.
Last reviewed . Structure and grading for the Hammer Reversal are reviewed against the scanner's own rules.