Bearish Hanging Man Pattern
BEARISH HANGING MAN PATTERN (BHMP)
a bearish reversal pattern
1. This can be seen at the market top or during an uptrend;
2. It is distinguished by its small body at the upper end of the trading range and is located above the trend;
3. It has a lower shadow, which is at least twice the height of the body; and
4. There is no upper shadow (or the upper shadow is very short).
The BHMP is a bearish reversal pattern. It is very comparable to the Bearish Dragonfly Doji Pattern (BDDP). In the BDDP case, the opening and closing prices are identical while the BHMP has a small body.
This pattern signals that selling pressure is starting to increase. Even though the bulls regained their footing and pushed the prices higher by the finish, the appearance of the selling pressure after the rally is a warning signal.
1. It is a top reversal pattern
2. Ideally, the lower shadow of the BHMP is 2 or 3 times the height of the body
3. The Bearish Dragonfly Doji Pattern is more bearish and more reliable than the BHMP
4. A confirmation of the reversal on the next day is needed for a more specific proof about the uptrend reversal (through a black stick, a large gap down or a lower close).