The hammer is a bullish reversal candlestick pattern characterized by a small body near the top, a long lower wick, and little to no upper shadow. It signals a shift from selling to buying pressure.

A doji forms when the open and close prices are nearly the same ... up), while red or filled-in candles are bearish (price went down). Patterns like engulfing or hammer provide deeper context.

Bullish Reversal Patterns and Bearish Reversal Patterns. For instance, a Hammer Candle Pattern is a bullish reversal pattern which tells us that a stock is nearing bottom in a downtrend.