Single-Candle Signals

Doji, hammer, shooting star, marubozu.

Six candles worth recognising Doji Hammer Shooting star Spinning top Bull marubozu Bear marubozu Doji Open and close almost equal. Neither side won. Meaningful only after a strong run, where it says the trend has paused. Hammer Small body, long lower wick. Price was pushed down and bought back hard. After a decline, that is buyers stepping in. Shooting star Small body, long upper wick. Price was pushed up and sold off. After a rise, that is sellers stepping in. Spinning top Small body, wicks both sides. Genuine indecision, both sides tried and failed. Marubozu Body with almost no wick. One side controlled the entire period. A candle in isolation means very little. A hammer at the bottom of a two-month decline is a signal. The identical hammer in the middle of a quiet range is noise. Context is not a refinement here, it is the whole thing.

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Charts.