Which of the following statements about the Hammer Candlestick is correct?
1
A hammer is a price pattern in candlestick charting that occurs when a security trades significantly higher than its opening, but rallies within the period to close near the opening price.
2
A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near the opening price.
3
Hammer candlesticks typically occur after a price surge. They have a small real body and a long lower shadow.
4
Hammer candlesticks indicate a potential price reversal to the downside.