Hanging Man
The Hanging Man pattern indicates that the current uptrend could possibly be over. This pattern is identical to the Hammer but will appear only during an uptrend.
Criteria:
The tail should be approximately 2/3 of the body
There should not be an upper shadow
The body is located towards the upper part of the candlestick
Even though the color of the candle is less important, a red candle will indicate to more bearish sentiment in future price movement.
*courtesy of stockcharts.com
Engulfing
The Engulfing pattern indicates that a change in trend is near, especially if the security has been in a trend that has occurred over a long period of time.
There are two types of Engulfing candles:
1) Bullish Engulfing- A candlestick that appears at the end of a downtrend.
2) Bearish Engulfing- A candlestick that appears at the end of an uptrend.
Criteria:
