Bearish Harami Pattern
BEARISH HARAMI PATTERN (BHP)
the mother and her baby
1. Market is on an uptrend;
2. Day 1 has a long white stick; and
3. Day 2 has a black stick whose body is completely engulfed by the body of Day 1.
The BHP is a two-candlestick pattern composed of a small black body contained within a long white body the previous day. It is a sign of disparity about the market’s health. The bull market is confirmed by the long white body’s vitality. But then there is a small black body which depicts uncertainty. This indicates that the bulls’ drive upward has weakened. Now, a trend reversal is possible.
1. “Harami” is a Japanese word for “pregnant”
2. The long white stick is the mother and the small stick is the baby.
3. A confirmation of Day 3’s reversal is necessary to ensure that the uptrend has reversed (through a black stick, a large gap down or a lower close).