Bullish Harami Pattern Explained

In Japanese candlestick technical analysis, the Bullish Harami pattern signals that a downtrend in an asset’s price may be about to reverse.

Read more: Japanese Candlestick Patterns | The 14 Most Common Trend-Reversal Patterns

The Bullish Harami is a candlestick chart indicator suggesting that a downtrend may be nearing its end. Some traders view a bullish harami as a signal worth watching before considering a buy position on an asset.

Key Points of the Bullish Harami Pattern:

• It is one of the reversal candlestick patterns, indicating the possibility of a trend change.
• It is generally marked by a slight price increase, shown as a small bullish candle that can be contained within the downward price movement of the two preceding candles.
• The candlestick on the chart is a type of chart used to track trades safely.

So traders looking to identify harami patterns should first look at the daily market performance shown on Japanese candlestick charts. Harami patterns form over two or more trading candles, and the Bullish Harami pattern relies on the initial candles to indicate whether the downward price trend is continuing to push the price lower, or whether it is about to reverse.

The Bullish Harami is plotted as a long bearish candle followed by a bullish candle with a smaller body, sometimes referred to as a doji, that is fully contained within the vertical range of the preceding bearish candle’s body. Some traders draw an outline around this pattern that resembles a pregnant woman. The word “harami” comes from an old Japanese word meaning “pregnant.”

For a full bullish harami to form, the smaller body of the following doji candle must close higher, inside the body of the preceding bearish candle, which points to a greater probability of a reversal.

In the chart above showing the Bullish Harami pattern, the first two black candles indicate a two-day downtrend in the asset, while the white candle represents a slight upward move on the third day, fully contained within the body of the previous candle. This may encourage traders to look for buying opportunities based on the pattern.

Trading the Bullish Harami Pattern

Analysts looking for quick ways to read daily market performance data rely on patterns in candlestick charts to speed up understanding and decision-making.

The Bullish Harami pattern is used to estimate possible reversals in the underlying price trend, and candlestick chart analysis offers a wide range of patterns for gauging future trends. The Bullish Harami is one of a group of core candlestick patterns, including bullish and bearish crossovers, evening stars, three white soldiers, and engulfing patterns, among others. It is considered one of the stronger patterns of this kind.

In short, the Bullish Harami is a reversal pattern that appears at the bottom of a downtrend. It consists of a bearish candle with a large body followed by a bullish candle with a small body, fully contained within the previous candle’s body, serving as a sign of shifting momentum — the small bullish candle is essentially a gap that opens near the middle range of the previous candle.

Read more:

• Explaining the Best 9 Patterns to Master Japanese Candlesticks in Trading
• High Wave Candle Pattern
• Learn About the Most Common Japanese Candlestick Patterns

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