Today, Nifty formed hanging man. This is important reversal pattern. Need to watch tomorrow’s action at open. If opens above close to today, chances that market will go up and if gaps down tomorrow, then today’s high could be short term high..

Hanging Man
The Hanging Man is also comprised of one candle. It is easily identified by the presence of a
small body with a shadow at least two times greater than the body. It is found at the top of an
up trend.
The Japanese named this pattern because it looks like a head with the feet dangling down.
1. The upper shadow should be at least two times the length of the body.
2. The real body is at the upper end of the trading range. The color of the body is not
important although a black body should have slightly more bearish implications.
3. There should be no upper shadow or a very small upper shadow.
4. The following day needs to confirm the Hanging Man signal with a black candle or better
yet, a gap down with a lower close.
Pattern Psychology
After a strong up-trend has been in effect, the atmosphere is bullish. The price opens higher
but starts to move lower.

The bears take control. But before the end of the day, the bulls step in and take the price back
up to the higher end of the trading range, creating a small body for the day. This could indicate
that the bulls still have control if analyzing a Western bar chart. However, the long lower
shadow represents that sellers had started stepping in at these levels. Even though the bulls
may have been able to keep the price positive by the end of the day, the evidence of the
selling was apparent. A lower open or a black candle the next day reinforces the fact that
selling is going on.
When identifying the Hanging Man signal under the correct conditions, with stochastics in the
overbought conditions, at the top of an uptrend, provides the information needed for
identifying the possibility of a trend reversal. When learning to play the stock market, being
able to put all the probabilities in ones favor is very important. When will an uptrend reverse?
When indications start appearing that demonstrate that the sellers are starting to take
control! The Hanging Man signal provides the elements that indicate the sellers stepping into
a trend.