Harami (Bearish)
A bearish harami is a two-candle pattern where a large bullish candle is followed by a smaller bearish candle whose entire body fits within the body of the first candle. "Harami" means "pregnant" in Japanese — the first candle is the "mother" and the small candle is the "baby." It signals that buying pressure may be weakening and a reversal could follow.
Bearish Harami candlestick pattern diagram
Pattern Anatomy
- Candle 1 (Mother): A large bullish (green) candle — buyers were firmly in control
- Candle 2 (Baby): A small bearish (red) candle whose body opens at or below the first candle's close and closes at or above the first candle's open
- The baby candle's entire body must fit within the mother candle's body
- Wicks can extend beyond — only bodies matter
- The smaller the baby candle, the more it signals indecision
How to Interpret
- Most significant after a sustained uptrend — signals weakening buying pressure
- Needs confirmation from the next candle closing lower
- Best when appearing at a known resistance level
- A volume decrease on the baby candle is typical and reinforces the indecision signal
How Engulfy Detects the Harami (Bearish)
- Previous candle must be bullish (Close > Open)
- Current candle must be bearish (Close < Open)
- Current candle’s Open must be ≤ the previous candle’s Close (the upper of prev’s body edges)
- Current candle’s Close must be ≥ the previous candle’s Open (the lower of prev’s body edges)
- This ensures the current candle’s body is entirely contained within the previous candle’s body
Expert References
- Steve Nison, Japanese Candlestick Charting Techniques — notes the harami pattern represents a market transitioning from decisiveness to indecision
- Thomas Bulkowski, Encyclopedia of Candlestick Charts — found bearish harami patterns act as bearish reversals approximately 56% of the time — slightly better than bullish harami but still modest
Controversy & Limitations
- Approximately 56% reliability is modest — better than a coin flip but not a standalone trading signal
- The pattern shows indecision, not a decisive reversal — the trend may simply pause and then continue
- Many traders wait for a third confirmation candle (forming a Three Inside Down pattern) before acting
- Debate exists over whether the baby candle's color matters — Engulfy requires a bearish baby for bearish harami classification