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Bearish Harami
Bearish Harami
A Bearish Harami is a two bar bearish candlestick pattern where each candlestick has the opposite color.
After a run-up in price, this pattern is formed when the real body of the second candlestick trades completely within the range of the real body of the previous candlestick.
How to identify
The 1st day is a long white day.
The 2nd day is a short day whose body is engulfed by the 1st day’s body.
Psychology
A long 1st day with high volume in the existing uptrend brings complacency to the bulls. The next day trades in a small range within the previous day’s real body.
Light volume on the 2nd day should give rise to concern by the bulls of an impending change of trend. Look for lower prices over the coming days, especially if the next day provides confirmation of a trend change by closing lower.
