Hanging Man is a bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buyers are able to push this index back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control. This formation does not mean that the bulls have definitively lost control, but it may be an early sign that the momentum is decreasing and the direction of the index may be getting ready to change. The reliability of this signal is drastically improved when the the index decreases the day after the signal. The location of this hanging man near the black downtrend resistance increases it significant and many candlestick chartists will be watching the next candlestick formation. A bearish candlestick bar will indicate a trend change and more downslide back towards mid Bolinger Band support at 12522. A bullish candlestick formation at this location will cause a breakout above both the major horizontal and downtrend resistance lines and increase the upthrust momentum propelling the index to challenge the previous peak at 13563.30 .
1 comment:
Thank you for your articles. It takes me back to my economics class in college. P.S. Thanks for the comment on my blog.
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