Bullish Harami Candlestick Pattern
A Bullish Harami candlestick pattern is a bullish reversal candlestick pattern. While there are several candlestick patterns that are single candlestick patterns, the Bullish Harami pattern is a 2 candlestick pattern.
In Westernized investment terminology, a Bullish Harami candlestick pattern is referred to as “an inside day”.
If I had to create a list of bullish reversal candlestick patterns in order or reliability, the Bullish Harami candlestick pattern would be near the bottom of my list. I do not personally like to trade this bullish reversal candlestick pattern.
While a Bullish Harami candlestick pattern may not be the best trend reversal identifier, it can and usually does signal the a bottoming process.
Requirements
Listed below are the requirements for a Bullish Harami candlestick pattern.
- A Bullish Harami candlestick pattern is a 2 candlestick pattern
- The 1st and 2nd candlesticks in the pattern are always opposite colored
- The real body from the 2nd candlestick is contained within the real body from the 1st candlestick
- The 1st candlestick pattern usually has a red colored real body, but it can be green
While a Bullish Harami candlestick pattern may not be the best trend reversal identifier, it can and usually does signal a bottoming process that has started or is about to start.
Characteristics & Observations
These are some of the characteristics and observations I have made with Bullish Harami candlestick patterns.[s2If !current_user_can(access_s2member_level1)]…..
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- The smaller the real body is on the 2nd candlestick in the pattern, the greater the chances are for a successful reversal back to an uptrend
- This candlestick pattern tends to indicate a trend reversal is near, not necessarily the actual reversal like most candlestick patterns
- A Bullish Harami Cross candlestick pattern has a better chance for a successful reversal than a regular Bullish Harami candlestick pattern
- The longer the downtrend is that precedes a Bullish Harami candlestick pattern, the better the chances are for a successful trend reversal
- The best performing patterns are a Bullish Harami Cross that has a red colored real body for the 1st candlestick
Bearish Counter-Part
The bearish counter-part to the Bullish Harami candlestick pattern is the Bearish Harami candlestick pattern.
The main difference between the Bullish Harami candlestick and the Bearish Harami candlestick is where they are located on a stock’s chart. A Bullish Harami candlestick pattern develops at the bottom of downtrends whereas a Bearish Harami candlestick pattern develops at the top of uptrends.
Support Area
The bottom of the lower shadow of the Bullish Harami candlestick pattern is the support area. If the Bullish Harami candlestick does not have a lower shadow, then the bottom of the real body is the support area.
A close below the support area for a Bullish Harami candlestick pattern nullifies the candlestick’s support. Sometimes a Bullish Harami candlestick pattern turns into a Bullish Tower Bottom candlestick pattern.
Trading Strategies
Because bullish reversal candlestick patterns are not as reliable as other bullish reversal patterns, it is best to wait for a re-test and rebound from the support area before trading a Bullish Harami candlestick pattern.
Bullish Harami candlestick patterns have a tendency to appear in Wave 4 of a Bearish Impulse Wave Pattern. That means there is one more break below the support area from the Bullish Harami candlestick. This is partly due to the tendency of a Bullish Harami to appear in a Wave 4 of a Bearish Impulse Wave Pattern. That Elliott wave perspective means that there is one more
Real Chart Examples
This chart is a 6 month daily candlestick chart for Johnson & Johnson (JNJ) that illustrates a Bullish Harami Cross candlestick pattern at the bottom of a recent downtrend. With the gray shaded boxes, I’ve also pointed out a couple of other Bullish Harami candlestick patterns that developed on JNJ’s chart.
A Couple of Different Bullish Harami Candlestick Patterns on Johnson & Johnson (JNJ) Chart, With a Recent Bullish Harami Cross Candlestick Pattern
From the couple of different Bullish Harami candlestick patterns I identified on JNJ’s chart, it does not appear to be the most reliable trend reversal signal.
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