Mastering Candlesticks: Bearish Harami

What is it?

“Harami” means “pregnant” in Japanese, and as you can see in the following image it is an appropriate name for this candle. The candlestick pattern is characterized by a large, better than average size white candle. While the second candle is a smaller black candle, usually a spinning top, which occurs completely inside the previous day’s real body.

Where is it?

We can usually find the Bearish Harami candlestick pattern occurring at or near a resistance level after a bullish swing. The second candle in the pattern is an indication the current momentum is slowing down and potentially shifting. Even though this pattern is considered bearish, in reality, it frequently turns into a sideways move taking the form of either a very short-term consolidation or perhaps a brief rest before continuing the trend.

What Should I Do When I See This Pattern?

The Bearish Harami candlestick pattern is surprisingly popular despite its relatively poor history of playing out in a bearish manner. Usually when one appears, it is best to take note and adjust your stops.