What is a Bullish Harami Candlestick Pattern?
A bullish harami candlestick pattern is a two-candle reversal setup where a large bearish candle is followed by a smaller bullish candle whose real body sits inside the prior candle’s real body.
It’s a “body-inside-body” formation, with the second candle’s open and close contained within the first candle’s open and close.
What Does a Bullish Harami Candlestick Pattern Indicate?
A bullish harami signals that downside momentum has stalled, because sellers drove price lower on the first candle but failed to keep control on the next candle as buyers absorbed supply and pushed to a higher close.
The shift is from urgency (strong selling) to hesitation (smaller range and a contained body), which often appears when a down move is running out of fuel near a decision area.
Is the Bullish Harami Candlestick Pattern Bullish or Bearish?
The bullish harami is a bullish reversal pattern, because it forms after a decline and shows selling pressure fading as the market prints a contained up-close candle.
How to Identify a Bullish Harami Candlestick Pattern?
A bullish harami is identified after a downtrend, when two candles print with a large red real body followed by a smaller green real body that is fully contained inside the first candle’s real body.
- Market context: a clear downswing or downtrend into the pattern
- Candle 1: large bearish candle with a relatively large real body
- Candle 2: smaller bullish candle
- Containment rule: candle 2 open and close fall within candle 1 open and close (wicks can extend beyond)
How to Trade a Bullish Harami Candlestick Pattern?
To trade a bullish harami, wait for confirmation that buyers can follow through, then enter long with risk defined below the pattern’s low and manage the trade into the next resistance area.
- Entry: buy on a confirmation candle that closes above the harami high, or use a stop-entry just above the harami high after it forms.
- Stop-loss: place the stop below the low of the two-candle formation (often below candle 1’s low).
- Invalidation: a clean break below the pattern low cancels the reversal thesis.
- Targets: take profits into nearby resistance (prior swing high, breakdown level, or a key moving average) and trail a stop if price trends.
- Filters: the setup trades best when it forms into a support zone and the confirmation candle shows strength (range expansion and a firm close).
What Happens After a Bullish Harami Candlestick Pattern?
After a bullish harami, price either follows through into a relief rally that retests overhead resistance, or it chops and rolls over if buyers fail to defend the pattern low.
- Common follow-through: a push above the harami high, then a move toward the next resistance area.
- Common retest: price revisits the harami area (or nearby support) before continuing higher.
- Common failure mode: a weak bounce that stalls quickly, followed by a breakdown below the pattern low and trend continuation lower.
What are the Different Types of Bullish Harami Candlestick Patterns?
The main bullish harami variant is the bullish harami cross, where the second candle is a doji instead of a small bullish real body, tightening the “indecision” message inside the prior bearish candle.