The hanging man and the hammer are basically the same candlestick patterns. The main difference between the two is in the location where the pattern develops. The bullish version of the hammer appears at the bottom of a downtrend, whereas the hanging man, the bearish version of the hammer, appears at the top of an uptrend. When the hanging man appears at the top of an uptrend or after a series of green candles, and possibly in overbought conditions, this indicates that a reversal is about to occur. In this case the hammer pattern, known as hanging man, is a bearish reversal. However, further bearish confirmation is required. If the next day the price opens below the previous day close and the bears (the sellers) are taking the price down, this is the bearish confirmation that the reversal has occurred.
The market has been range bound for the last few weeks with volatility on the decline, and earnings all over the place. So where to go to look for a trade? Nike has already had Earnings and is near a low of the year, so seems like a good option. As a contrarian that can mean only one thing to me: I have to make a trade with the assumption it will go up from here over the next 45ish days. We will do that by making a Long Call Vertical trade to bet that it starts to head up over the next couple months. For more on my trading and how to join me in real time, see below. Watch the video to get the details. Kal Trading Risk Disclaimer All the information shared in this video is provided for educational purposes only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, commodities, options and forex, there is also substantial risk of loss. All tr