What is a hanging man candlestick pattern?

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The hanging man candlestick pattern is a bearish signal that indicates a stock will likely end an upward streak. It is a very powerful reversal pattern.

This consists of only 1 candlestick. What happens is the given stock has been bullish. However 1 day it opens up and starts to fall. The bears take control of the stock and drive it down.

The bulls come in later in the day and drive the price back up. The stock can either finish the day bullish or bearish it doesn’t matter. What it does show is that the bulls are starting to lose strength. Because the bears were able to gain ground it could also mean that the shorters are gaining strength.

The candlestick has a head and a long tail. That gives it the impression of being a man who has just been hung. Another reason for that name is it can mark the death of a rally. It is the second candlestick on the chart.