Hammer is formed in NIFTY Daily Charts

I will explain a new candle stick pattern- Hammer. Hammer is fomred when the market open, high and close are almost at the same level. As this pattern can has been made today in NIFTY Charts i thought its better to explain it. Below is the diagram of Hammer:

From above it can be seen that the open, high and close are almost at same level as a result of which the body of candle(orange color) stick is thin and small.

What does this pattern Indicates: If observed in downtrend hammer is considered as significant reversal pattern. Also important is that the size of the wick should be atleast twice the body of the candle...otherwise its not considered as significant...

To learn more about hammer click --> Hammer Pattern

NIFTY Chart: As i predicted yesterday that NIFTY might open at lower level, move down a bit then will recover in later part...this exactly happened today..Below is the NIFTY chart which tells this story

               

Now if we look at daily charts of NIFTY we can see that it has formed a Hammer.

                     

                             Base Chart Source: http://www.icharts.in/charts.html

                      The hammer us marked by the orange circle in the above diagram

Although Hammer is considered as significant reversal apttern only if its observed in a downtrend. As we can see in NIFTY chart there is no significant downtrend present but if we consider the fall in NIFTY over last couple of days we can consider it as mini downtrend (indicated by green arrow). Thus if we assume it as downtredn and look at hammer..it can be considerd that markets will move up tomorrow.

Again as can be seen on RSI that RSI has started moving up towards 70 mark line (indicated by orange arrow). Thus it also indicates that NIFTY will move up tomorrow....

Hope I am correct :-)

I would love to receive comments on my predictions...