Bullish Harami |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bullish
Prior Trend of Candlesticks: Bearish
Reliability of Candlesticks : Confirmation Required
Confirmation of Candlesticks: Suggested
Candlestick Patterns Key Reference |
DESCRIPTION
Bullish Harami pattern is a two candlestick formation.
Bullish Harami pattern is recognized by a small bullish candlestick real body which contain within the previous long bearish candlestick real body.
"Harami" in Japanese means "Pregnant". The long bearish candlestick is "The Mother" and the small candlestick is "The Baby".
PATTERN RECOGNITION
1. Bullish Harami pattern can be identified by downtrend.
2. Refering to above diagram, we will firstly see a long bearish candlestick.
3. Then we will see a following small bullish candlestick where the its real body is completely engulfed by the real body of the first long bearish candlestick.
The upper and lower shadows of the second candlestick are not required to be contained within the first candlestick's body, however it will be preferable if they are.
EXPLAINATION
The Bullish Harami pattern is a sign of trend reversal.
While the market is in a downtrend, there is a strong selling force reflected by a long bearish candlestick body.
However it is followed by the second small bullish candlestick's body. This signal a trend reversal since the small bullish candlestick's real body indicate that the bearish momentum starts to weaken.
The Consolidation Patterns imply that the trend may have ended and may go sideways. There is a possibility of a reversal but would require confirmation in the next session.
POINT TO NOTE
The actual fact about Bullish Harami pattern is that the second bullish candlestick has a small real body which its real body is completely engulfed by the prior candlestick.
The Bullish Harami pattern does not necessarily mean that a rally will follow.
The market normally enters into a congestion phase followed by a bullish harami pattern.
We need a third bullish candlestick with a large gap up or by a higher close as a confirmation to be sure that the downtrend has reversed.
CANDLESTICK PATTERNS KEY REFERENCE
Irrespective of Color (Can be bullish or bearish) |
Uptrend |
Consolidation |
Downtrend |
ANTICIPATED DIRECTION OF TREND
Lighter Arrow = Lower Probability
Solid Arrow = Higher Probability
More Likely to go sideway, Less likely to rally
|
More likely to rally, Less likely to go sideways
|
More likely to go sideway, Less likely to fall
|
More likely to fall, Less likely to go sideways |
