Chartered Market Technician Practice Exam 2025 – Complete Prep Guide

The candlestick pattern that suggests a reversal after an upward move and is characterized by a small real body is known as the Hanging Man. This pattern typically appears at the top of an uptrend and indicates potential selling pressure, as the small real body suggests that despite the initial bullish movement, there is a lack of commitment from buyers to sustain the price level.

The Hanging Man features a long lower shadow, which indicates that sellers have pushed prices down significantly during the trading session but that buyers were able to bring prices back up toward the opening price, leaving a small real body near the high of the day. This can serve as a warning signal that the upward trend may soon reverse.

While the Inverted Hammer is similar and often seen after a downtrend, the primary distinction lies in the context: the Hanging Man appears at the top of an uptrend to signal a potential bearish reversal, whereas the Inverted Hammer occurs in a downtrend suggesting a potential bullish reversal. The other choices, such as the Morning Star and Tasuki Gap Bullish, represent different situations and patterns in candlestick analysis, emphasizing either bullish continuation or reversal but not specifically the characteristics that the Hanging Man embodies.