This is a reversal pattern.  There was a bullish trend starting from 16-12-15 ti 29-12-15.  Then on 30-12-15 there is a Hanging Man pattern.  The lower tail is very small.  The upper tail is more than 2 times the body size.  So I have taken a short position.  The volume is good on the Hanging Man Pattern day.  I have selected the entry date as 31-12-15.  The rate on 31-12-15 is lower than the low of the previous day.  The entry rate is the lowest of the Hanging Man pattern day which is Rs 261.80.  The stop loss point is the highest point at RS 264.10.  The risk is Rs 2.30 which is the difference between Rs 264.10 and Rs 261.80.  Two times the risk deducted from my entry point is the Target at Rs 257.20.

2 Comments
  1. Naresh 2 years ago

    Hi,
    Hanging man have a small body with a long upper tail pattern. Hanging man is a bearish reversal pattern, as the buyers were initially in charge but yet the sellers were capable to reverse that control and drive prices back up to close near the low for the day.

    Conditions
    Hanging man have a small body with a long upper tail.
    The lower tail should be invisible or very small in size.
    Volume should be high during hanging man day.
    Hanging man should be red in color.
    Hanging man occur after a price incline

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