A small body at the top of a long lower wick — the hammer's shape, but appearing after a rally instead of a decline. Selling pressure surfaced mid-session where none had been.
Shape and reading come apart here. The candle looks bullish in isolation, since buyers recovered the day's low. What makes it a warning is where it appears: after an advance, that mid-session drop shows sellers testing the market for the first time.
The lower wick should run at least twice the real body. A close below the open strengthens the reading, though the shape matters more than the colour.
Read it as the first evidence of supply rather than as a top. It says sellers appeared, not that they won.
It fails more often than most bearish signals, because a recovered dip genuinely is bullish behaviour in most contexts. Many hanging men are followed by the uptrend simply continuing.
It appears constantly in volatile uptrends where intraday swings are wide by nature. In such stocks the shape carries almost no information.
Confirmation matters more here than with almost any other pattern. Without a next-day close below the hanging man's body, there is very little to act on.