DEFINITION of 'Hikkake Pattern'
A charting pattern used by technical traders which is used in identifying market direction. The Hikkake pattern is identified by its resembelance to an inside bar pattern, where the range of a new point or bar falls outside a previous point or bar. This breakout can be reflect both a bullish or bearish outlook, depending on the direction of the breakout (above or below a previous high or low).
BREAKING DOWN 'Hikkake Pattern'
From a Japanese word meaning "hook, catch, ensnare," it was first described by Daniel L. Chesler, CMT. When traders are committing capital to a market only to see it move away from what they expected, what is described in charts is a hikkake pattern, giving the impression the market has hooked or tricked traders into thinking the market was moving in a particular direction.