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So something better would be to wait for confirmation, this would be a better hammer to play on if there was acting resistance around that price level. This could signal a brief consolidation, but nothing to go short on because of the strong rally. Otherwise, don't go short because the chart is overall very bullish. |
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Yes, I would have trouble shorting a hammer. The formation may be a hanging man, but I have a really hard time seeing that as bearish. To me, it says the bears tried to push it down and the bulls ran it right back up. I suppose you could consider shorting a hammer/hanging man right at a resistance level, but I do not play those so no idea of the reliability. You could be onto something here, but make sure you do plenty of homework.