Hanging Man

The Hanging Man candlestick is a special case of the Dragonfly Doji. The Hanging Man forms when a stock moves significantly lower after the open, but rallies to close well above the intraday low.

Hanging Man

The Hanging Man candlestick is a special case of the Dragonfly Doji.  

 


Hanging Man Identification

The Hanging Man forms when a stock moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with a long stick.  The (square lollipop) candlestick is called a Hanging Man when it occurs after a price run-up.  After a price decline, the same candlestick is called a Hammer.

Hanging Man candlestick


Interpretation of Hanging Man

Confirmation is required with any single candlestick.  The Hanging Man formation shows the price goes much lower than the open then closes near the opening price. This could mean that many longs have positions that they are attempting to sell.  Ideally, a "down day" (close less than open) Hanging Man with a lower open the following day could be a bearish signal for the days ahead.


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