Bearish Harami

The Bearish Harami double candlestick formation is similar to the Bearish Harami Cross.  Both patterns are considered by traditional technical analysts to be "inside day" formations. 

Bearish Harami

The Bearish Harami double candlestick formation is similar to the Bearish Harami Cross.  Both patterns are considered by traditional technical analysts to be "inside day" formations.  The difference between the two candlestick patterns is that the second day of the Bearish Harami is not a Doji.


Bearish Harami Identification

The Bearish Harami candlestick formation is a two day pattern that has a small body day completely contained within the range of the previous body, and is opposite in direction.   The Harami is bearish when there is a large bullish candle on Day 1 followed by a smaller bearish candle on Day 2. 

Bearish Harami candlestick pattern

Interpretation of Bearish Harami

The Bearish Haramiis similar to the Bearish Engulfing Pattern, except that day 2 of the pattern trades inside the day 1 body.  This is in contrast to the Bearish Engulfing Pattern where day 2 range is outside the day 1 range both in high and low price.

In range bound markets the Bearish Harami will occur frequently with little significance.  But if this pattern occurs after an uptrend, it takes on greater significance.  If the Bearish Harami does turn out to be a reversal pattern then the high of the two candles will likely turn into a significant resistance level.

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