Rejection

An informal description of a shape rather than a measured quantity. What it points at is mechanical: a candlestick whose wick extends well beyond its body records an interval in which price traded at an extreme and did not stay there. Where that extreme coincides with a level a reader was already watching, a prior swing high, a round number, a moving average, the interval is habitually described as a rejection of that level.

The distinction usually intended is against a break. A break carries price beyond the level and closes it there; a rejection reaches the level and closes back on the side it came from. Several named single bar formations are rejections with additional conditions attached, among them the hammer and the hanging man, which differ from each other only by the direction of the move that preceded them.

The word smuggles in a cause. A chart records that price returned, not who returned it or why, and the same mark is produced by a large resting order, by a thin book at an inconvenient hour, and by an ordinary two way market. It is also strongly frame dependent: an emphatic rejection wick on an hourly chart is an unremarkable range on a daily one, and a daily rejection is invisible on a weekly. Practitioners disagree about whether a single wick carries information at all, and most who use them treat one as a description of the interval rather than as evidence on its own.