Bearish Harami

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Figure 1.

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.

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.

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!

Pattern name: Bearish Harami
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Bearish Harami): 33,846
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Bearish Harami): 5.30 %
Average frequency: 66.1
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
13 5,545 11,295 6,968 10,025
% of
Occurrences
0.04 % 16.34 % 33.37 % 20.59 % 29.66 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
58 5,137 9,172 6,219 13,260
% of
Occurrences
0.17 % 15.01 % 27.10 % 18.37 % 39.35 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
GILD 91 55.3 45 49.45 % 52 58.25 %
SLB 85 59.2 36 42.35 % 46 54.12 %
ADSK 82 61.4 39 47.57 % 44 53.66 %
BBBY 75 67.1 31 41.34 % 40 53.33 %
SCHW 75 67.1 34 45.33 % 40 53.33 %
AA 77 65.4 32 41.56 % 41 53.24 %
KSS 77 65.4 33 42.85 % 41 53.24 %
RIG 77 65.4 32 41.56 % 41 53.24 %
CTAS 74 68.0 29 39.19 % 39 52.70 %
CTXS 80 61.5 38 48.75 % 41 52.50 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
PXD 76 66.2 21 27.63 % 21 27.63 %
ADI 81 62.1 22 27.16 % 22 27.16 %
MU 73 69.0 19 26.03 % 19 26.03 %
GS 75 54.2 20 26.67 % 19 25.33 %
WDC 81 62.1 20 24.69 % 20 24.69 %
VLO 90 55.9 22 23.33 % 22 23.33 %
LLTC 78 64.5 20 25.64 % 19 24.36 %
XRX 88 57.2 22 25.00 % 21 23.86 %
EA 81 62.1 19 23.46 % 19 23.46 %
EMN 82 61.4 19 23.17 % 19 23.17 %
Pattern name: Bearish Harami
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Bearish Harami): 8,438
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Bearish Harami): 5.07 %
Average frequency: 72.8
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
13 1,306 3,613 1,796 1,710
% of
Occurrences
0.15 % 15.33 % 42.82 % 21.28 % 20.42 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
58 1,136 2,884 1,724 2,636
% of
Occurrences
0.69 % 12.77 % 34.18 % 20.43 % 31.93 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
CBS 20 62.9 7 35.00 % 12 60.00 %
JPM 20 62.9 7 35.00 % 12 60.00 %
DISCK 17 74.0 8 47.07 % 10 58.83 %
JNPR 17 74.0 9 52.94 % 10 58.83 %
DAL 24 52.4 13 54.16 % 14 58.33 %
KSS 18 69.9 6 33.33 % 10 55.56 %
ENDP 18 69.9 5 27.78 % 10 55.55 %
OMC 17 74.0 6 35.30 % 9 52.95 %
DVN 19 66.2 8 42.10 % 10 52.63 %
GMCR 21 59.9 9 42.85 % 11 52.38 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
AXP 18 69.9 9 50.00 % 8 44.44 %
BMY 17 74.0 6 35.29 % 6 35.29 %
C 20 62.9 7 35.00 % 7 30.00 %
EA 20 62.9 7 35.00 % 7 35.00 %
HPQ 19 66.2 6 31.58 % 6 31.58 %
VLO 26 48.4 8 26.92 % 8 26.92 %
LNC 23 54.7 7 30.43 % 7 30.43 %
BAC 20 62.9 7 35.00 % 6 30.00 %
CTAS 17 74.0 5 29.41 % 5 29.41 %
VRTX 24 52.3 7 29.17 % 7 29.17 %

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