Bullish Harami candlestick pattern

Bullish trend


Bullish harami Candlestick pattern as the name itself suggests that it is a bullish trend reversal pattern that can help you to identify bullish reversal in the chart.

It is among those patterns which you can easily find in the charts and also appears frequently.

It is said that Bullish Harami does not give strong signals as compared to others like bullish engulfing, but it becomes useful and important when used with indicators like moving averages and oscillators. This pattern is seen frequently in the charts and hence gain attention by traders.

But you need to be careful and make your system full proof to get proper confirmation if you use this pattern

Let’s find out its characteristics and other key features that may help you to identify a proper trend.

Physical appearance of Bullish Harami pattern

It is formed by a combination of 2 candlesticks, one is bearish and the other is bullish.

  1. The first candlestick needs to be bearish with a strong bearish sentiment. It has to be sufficiently long.
  2. The second candlestick is a small body bullish candlestick. This is the confirmation of pattern that gives a kick start to bullish trend.
  3. Found after a downtrend.
bullish harami__1
Source: Economic Times

Market interpretation of Bullish Harami pattern

When the first candlestick forms which are strong bearish candle you will think rather the market thinks that the trend will persist and the bearish mode is active and will remain on.

The main interpretation lies with the formation of the second candlestick which tries to communicate that the sellers are not active now and buyers have joined the game.

There are no more sell orders in the market and sellers are exhausted while the Bulls are willing to drive the market.

There is a bit confusing that starts in the market when the second bullish candlestick formation takes place. Here you need to assure your analysis using technical indicators.




Try this before you jump into the market

As said earlier this candlestick pattern does not give strong signals and need to be identified carefully. You need to train your eyes to know how this works and assure that your analysis does not give you false signals.

bullish harami__3
Source: Economic Times

 

Key points to remember

  1. 2 candlestick pattern
  2. Weak signal, need to be used with proper indicators
  3. Works well after bearish trend
  4. The second candlestick need to be small and bullish in nature for confirmation of this pattern




Find other candlestick patterns here

Bottom line

This candlestick pattern when not used consciously can make you suffer from the loss. Though loss and profit are the ongoing consequences of market, all you need to have a better confirmation and risk management

Don’t jump blindly looking into the bullish harami pattern

A wise man once said hurry is the weakness of fool

-Baltasar Gracian

Post Author: Sushant Putatunda

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