A hammer is a single-candle bullish reversal pattern with a small body near the top and a long lower wick, at least twice the length of the body. It appears after a fall and shows that buyers rejected lower prices during the session.
Here is what happened inside that candle. Sellers pushed the price well down, but by the close buyers had pulled it back near the opening level. That rejection is the message. The body can be green or red, though a green hammer is generally read as slightly stronger.
Take a hypothetical case. A stock has dropped from ₹210 to ₹180. The next day it opens at ₹181, falls to ₹170 during the session, then recovers to close at ₹183. The lower wick of ₹11 is far longer than the ₹2 body, so that is a hammer. A trader might wait for the next day to close above ₹183 before considering an entry, with a stop below ₹170.
Do not confuse it with a hanging man, which has the same shape but appears after a rise and is read as bearish. Location decides the name and meaning.
Beginners also take hammers on 1-minute charts, where they form all the time and mean little. They are much more useful on daily or hourly charts at clear support. Single-candle patterns like this are covered early in our Technical Analysis course.