Not of the type MC, this is instead a reversal pattern, similar to the doji (to be covered below, right) that shows a possible top or bottom by constant run in one direction or another.
You can see here I have listed the hammer at 10:38 am or so in stock.
It looks like the letter T, with little body on top. A reverse pattern is good for blues (and is covered in a bearish candlestick lesson).
As the name implies, it looks like a small hammer. The shopping here with my strategy would buy more than 42 3 / 8 (with stop loss at 42), and an initial output of about 43 1 / 8 or so.
I've noted YHOO hammer in the open for you, just after 9:30.
The other pattern I've highlighted a candle (spinning top?) What looks like a doji, as the stock market is back in his head.
Learn to follow the hammer as an initial indicator that has continued buying in stocks for bullish hammers are shown in these two examples.
Sunday, May 29, 2011
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