The Bullish Harami pattern is a two day pattern. It is made with one bullish candlesticks and a bearish candlestick. This is a potential trend reversal pattern and it is not as significant as a engulfing pattern or hammer.
First day a large bearish candlestick.
Second day is a small bullish candlestick whose real body is between the real body of the first day’s large candlestick real body.
Psychology of this pattern is that the market is in downtrend and a long bearish candlestick appears, that likely makes a new low. It is clear that the bears are in charge. However, the second day gaps higher instead of heading lower . During the second day, the price moves slightly up and down, suggesting that neither the bears nor bulls are in charge. This indecision of the harami pattern suggests that prices could move sideways or could reverse upward because the bears’ downward move has been exhausted.
The harami pattern is not as significant a reversal pattern as an engulfing pattern or hammer.
If the second day of the Bullish Harami pattern is a doji rather than a small bullish pattern then the pattern is usually called Bullish Harami Cross Candlestick pattern. The Harami Cross Candlestick pattern is a major reversal signal.
A bullish Harami got its name because it resembles the appearance of a pregnant woman. “Harami” is the Japanese word for pregnant.
