Bearish Harami

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Figure 1. Bearish Harami pattern.

Japanese name: harami
Forecast: bearish reversal
Trend prior to the pattern: uptrend
Opposite pattern: Bullish Harami
Extended pattern: Three Inside Down

Construction:

• First candle
  • a candle in an uptrend
  • white body
• Second candle
  • black body
  • candle's body engulfed by the prior (white) candle's body

This article is devoted to the Bearish Harami two-line pattern.

The Bearish Harami is a two-line pattern which the white candle's body of the first line engulfs the black candle's body of the second line.

The first line can be any basic candle with a white body, appearing as a long line, i.e.: White Candle, Long White Candle, White Marubozu, Opening White Marubozu, Closing White Marubozu. Candles being spinning tops, even with white bodies, cannot appear on the first line.

The second line can be any black basic candle, appearing both as a long or a short line. It can be even a doji candle, except the Four-Price Doji.

The shadows do not matter what is explained in the following article: Two-Line Patterns.

The pattern appears in an uptrend and forecasts its reversal. The Bearish Harami pattern needs confirmation on the subsequent candles.

Morris created the Three Inside Down pattern as a confirmation of the Bearish Harami. The pattern can be confirmed by breaking the nearest support zone or a trendline.

If a candle following pattern's appearance closes above the opening price of the second line (i.e. black candle), it is likely that an uptrend will be continued. Conversely, when a candle following the pattern closes below its second line, there is a chance that the uptrend will be stopped.

The one should be careful when the first line of a Bearish Harami has a long white body as it may form a strong support zone.

The market context in which a Bearish Harami is being developed is more important than the candles' bodies or shadows length.

Figure 2. The biggest "problem" of the Bearish Harami pattern is its first line. Because it is a white candle appearing as a long line it creates a support zone. Confirmation of this pattern is critical. Greg Morris created for that purpose an extended version of the pattern, Three Inside Down, by adding the third line to the Bearish Harami pattern. However, even then we should wait until the first line of the Bearish Harami is wholly beaten.

Figure 3.  A Bearish Harami pattern occurs within a strong resistance area formed by a Long Black Candle being part of a Turn Down pattern. Strength of a resistance zone is emphasized by a high trading volume.
The Bearish Harami is confirmed by the Long Black Candle being the third line of a Three Inside Down pattern.
The literature describing the harami patterns, most often mentions that the second line should have a small body. The question is how small should be small. Tests performed by CandleScanner software proves that it is enough if just the first line body engulfs the second line body.
What does matter, however, is the market context which is crucial when assessing a particular pattern occurrence.

Bearish Harami statistics

Below you can find some Bearish Harami pattern statistics calculated by CandleScanner software. To see more detailed statistics, for other markets and periodicity try our CandleScanner software. Prices start at only $10, and you can see more detailed statistics, for other markets and periodicity. Click here to find out more!