The hammer is probably the first candlestick pattern anyone learns, and it has a great story behind it. Sellers push the stock down hard during the day, buyers step in and drive it most of the way back up, and the candle that’s left looks like a hammer: a small body at the top and a long handle underneath.
The story says that’s a bottom forming. Our scanner has flagged 8,594 hammers across 559 US stocks and ETFs over the past three years, so I went and checked.
What a hammer looks like
- A small body near the top of the day’s range. Colour doesn’t matter much.
- A long lower shadow, at least twice the length of the body.
- Little or no upper shadow.
- It shows up near a recent low. TA-Lib, the library the scanner uses, also wants the body to sit at or near the bottom of the previous candle.
The same shape at the top of a rally is called a hanging man, and it’s supposed to mean the opposite.
How often the stock went up afterwards
| After a hammer | Higher 1 day later | Higher 5 days later | Higher 20 days later |
|---|---|---|---|
| Hammer (8,594 cases) | 52.0% | 54.1% | 54.7% |
| Any day (413,000+ cases) | 51.9% | 53.8% | 55.6% |
So a hammer was followed by a gain a little more often than a random day over a week, by 0.3 of a point, and a little less often over a month. With this many cases, the numbers are accurate to about one percentage point, so that’s essentially no difference at all. The typical five-day move after a hammer was +0.38%, against +0.34% for any day.
Does it work better after a selloff?
That’s the standard defence: a hammer only counts after a decline. So I split the hammers by what the stock did over the previous 10 trading days.
| Before the hammer | Cases | Higher 5 days later | Any day in the same situation |
|---|---|---|---|
| Fell more than 5% | 1,880 | 54.1% | 54.0% |
| Moved less than 5% | 5,066 | 54.3% | 53.1% |
| Rose more than 5% | 1,479 | 53.3% | 53.7% |
After a real selloff, which is exactly where a hammer is supposed to shine, it did no better than any other day after a selloff. Over 20 days it actually did worse: 53.6% against 56.3%.
Waiting for confirmation helps a little
Many traders won’t act on a hammer until the next day closes higher. This is the one place I found something.
| Cases | Higher 5 days after the confirming day | |
|---|---|---|
| Hammer, then a higher close | 4,370 | 55.1% |
| Any up day | 206,605 | 52.7% |
A confirmed hammer beat an ordinary up day by about 2.4 points. The margin of error at that sample size is about 1.5 points, so it’s probably real, but it’s small. It’s the difference between a coin that lands heads 53 times out of 100 and one that lands heads 55 times.
How I’d actually use it
As a reason to look, not a reason to buy. If a stock you already like prints a hammer at a level that matters, and the next day follows through, that’s a reasonable spot to start a position or sell a cash-secured put below the hammer’s low. The low of the hammer also gives you an obvious place to be wrong.
What I wouldn’t do is buy every hammer the scanner finds. Across thousands of them, that’s barely better than buying at random.
Recent hammers
The scanner flagged 179 hammers in October 2026 alone, including BEAM, CIEN, DHR, NCLH and PLTR on October 23. Each ticker page shows that stock’s own track record with the pattern. Today’s list is always on the candlestick scanner.
For every pattern side by side, see Do Candlestick Patterns Work?
Data: daily prices for 559 US stocks and ETFs, October 2023 to October 2026, patterns detected by TA-Lib. Educational only, not financial advice.