Is this a reliable hammer candlestick?

Breakout and close above hammer bar could be a possible entry point, though my main and mostly only indi ROC (length of 10 and 20 for daily timeframe) are both cratering so not looking very bullish ATM:-

 

In

Thank you

 

Thanks Suntrader!

 

Can you indicate where you think the hammer is? I don't see a hammer at all, just some smaller candles at the end.

 

Uh duh the bar before the last one. As OP said yesssssterday's bar ... on a daily chart.

 

You did not show this image.
Always see the forest for the trees first.


It is going sideways.
It will continue to go sideways until the chart says otherwise.

Do not expect the resistance and support lines to be perfectly horizontal & rigid.

Anyway it is time for you to throw away your candlestick book.

 

The first thing when looking at the forest vs the tree . . . is to make sure that one is actually looking at "TESCO" (TSCO.L) trading around 375 and not looking at "Tractor Supply Company" (TSCO) trading round 56.

 

The reason it is called a Hammer is because it is "hammering out a bottom".
That means it is forming a bottom.

• A single stick cannot form a bottom.
• a bottom is formed by multiple tests, a volume verification and usually a break down test and recovery on volume.

So the answer is no. That is just a pause in a downtrend not a reversal sign. What you want is a bullish engulfing candle, or an island gap up or something that show there is actual up momentum. AND even if you had those, it is too soon after the trouncing to be a high probability trade with enough "meat on the bone" to take such a risk.

 

I looked at tractor supply and you could argue that it also had a hammer.

 

I have traded that pattern (Narrow bottom with a long lower tail on above average volume) as a reversal signal. Stock trending up then trades down for a few days and reverses direction with what I call a hammer.