medium · Volume Price Analysis vpa-core
A 'Hanging Man' candle appears at the top of a 3-week rally in a stock. It has a long lower wick and ultra-high volume.
Why is this considered a bearish signal rather than a bullish hammer?
- The candle is anomalous because the effort exerted was low relative to the resulting price action.
- It shows significant selling pressure appeared for the first time in the trend.
- A Hanging Man candle, by strict definition, always signifies a classic 'No Demand' bar.
- It confirms decisively that buyers have completely and permanently withdrawn.
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