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Candlsestick Pattern 5

Thursday, February 19, 2009 | Labels: , , , | |

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(5) Inverted Hammer

If you are a regular Swing Trader reader, then the inverted hammer should seem very familiar. However, you may not be able to put your finger on exactly why it looks so familiar.

The reason is that the inverted hammer is identical in appearance to the shooting star,. After singinficant down fall it inverted hammer pattern occured. To find out this pattern we require very keen and depth study

If you examine the inverted hammer carefully, it hardly looks like a bullish candle. Prices opened low and then rallied strongly. By the close of trading, however, the stock has given back almost all of the day's gains. That leaves a small real body and a very large upper shadow. If anything, the candle looks bearish. The bulls could not sustain a rally, so the bears took the stock back toward its lows for the day.

If we think that this singnal give indiacation of short covering start. It could avoid loss being in position. So we can cover position as early as possible.

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