Atlanta Braves Holdings (BATRK – Free Report)’s price trend has been bearish recently, with the stock down 7.2% in the last four weeks. However, the formation of a hammer chart pattern in its most recent trading session suggests that the stock could experience a trend reversal soon, as bulls may have gained sufficient control over the price to help it find support.
The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that makes a bullish case for the stock. On the fundamental side, strong agreement among Wall Street analysts in raising earnings estimates for this owner and operator of the Atlanta Braves baseball club enhances its prospects of a trend reversal.
This is one of the popular price patterns in candlestick charting. A minor difference between the opening and closing prices forms a small candle body, and a higher difference between the low of the day and the open or close forms a long lower wick (or vertical line). The length of the lower wick being at least twice the length of the real body, the candle resembles a ‘hammer.’
‘In layman’s terms, during a downtrend, with bears in complete control, a stock typically begins lower than the previous day’s closing and closes lower. The stock reaches a new bottom on the day the hammer pattern forms, indicating that the downturn continues.
However, after eventually finding support at the day’s low, some buying interest appears, propelling the stock higher and closing the session near or slightly above its opening price.When this pattern appears near the bottom of a downtrend, it indicates that the bears may have lost control of the price. Furthermore, bulls’ success in preventing further market declines suggests a possible trend reversal.
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