The Harami (Japanese for "pregnant") is a two-candle pattern where the second candle's body is completely contained within the first candle's body. The pattern signals that the current trend is losing momentum. It is a reversal signal โ less aggressive than the Engulfing pattern, but still reliable when combined with other indicators.
Bullish vs Bearish Harami
Harami vs Engulfing โ Key Difference
| Pattern | Day 2 size | Strength | Wait for confirmation? |
|---|---|---|---|
| Harami | Smaller than Day 1 | Moderate | Always |
| Engulfing | Larger than Day 1 | Strong | Recommended |
Trading the Harami
Bullish Harami Strategy:
Wait for a third confirmation candle (bullish close above Day 2 high)
Entry: Open of Day 4
Stop Loss: Below the low of Day 1 (large red candle)
The Harami alone is NOT enough โ confirmation is essential
Wait for a third confirmation candle (bullish close above Day 2 high)
Entry: Open of Day 4
Stop Loss: Below the low of Day 1 (large red candle)
The Harami alone is NOT enough โ confirmation is essential
Harami Cross โ Strongest Variation
When the second candle in a Harami is a Doji (open = close), the pattern becomes a Harami Cross โ considered significantly more reliable than a standard Harami because it shows complete indecision at an extreme.
Look for Bullish Harami Cross patterns on NSE stocks at the end of strong earnings-driven selloffs. The Doji inside a large bearish candle often marks the exhaustion point where institutional sellers have finished distributing and retail panic has peaked.
