Harami
The Harami (meaning "pregnant" in Japanese) Candlestick Pattern is considered a reversal
pattern. The pattern consists of two Candlesticks:
- Larger Bullish or Bearish Candle (Day 1)
- Smaller Bullish or Bearish Candle (Day 2)
The Harami Pattern is considered either bullish or bearish based on the
criteria below:
Bearish Harami: A bearish Harami occurs when there is a large bullish green candle on Day 1
followed by a smaller bearish or bullish candle on Day 2. The most important
aspect of the bearish Harami is that prices gapped
down on Day 2 and were unable to move higher back to the close of Day 1.
This is a sign that uncertainty could be entering the market.
Bullish Harami: A bullish Harami occurs when there is a large bearish red candle
on Day 1 followed by a smaller bearish or bullish candle on Day 2. Again, the
most important aspect of the bullish Harami is that prices gapped up on Day 2 and price was held up and unable to
move lower back to the bearish close of Day 1.
Inside day / Harami formation in daily time frame gives a very good opportunity to trade in the next day opening, Every day try to find out which scrips had formed this HARAMI formation and try to keep an eye on them and trade
