Since the ‘Bullish Harami’ is less effective during major trend reversals, traders should ideally use other trading indicators. Trend reversal happens when a stock has been on a downtrend for a longer period of time. The ‘Bullish Harami’ can be formed during a ‘trend reversal’ or ‘trend continuation’. Those who are looking to take short term or medium term positions, then the charts to be looked at would be 60 minute, Daily and Weekly. If the ‘Bullish Harami’ appears on any of these time frames and the next candle after the pattern is bullish, a trade can be taken. Intraday traders can look at 5 minute, 10 minute and 15 minute charts. The pattern is quite common and can be formed very frequently on charts. The ‘Bullish Harami’ pattern works fairly well across all time frames. If the stock opens higher on the third day (i.e after the Bullish Harami formation) – then it’s a confirmation that the trend could reverse and the stock price could go up. With the rise in price, the grip of the sellers is weakening. They cover their short positions – this takes the price further up. Looking at the rise in price, those who are short on the stock, begin to fear that the stock might rise up. One day, a big red candle gets formed – which means, the sellers are in complete control. It’s purely demand vs supply.Ī stock has been falling for the last few days. The stock price is always a battle between the bulls (buyers) and bears (sellers). The second green candle has to be smaller in size and between the body of the previous red candle.The second candle should be green (bullish).The first candle has to be large and red ( bearish). The word ‘Harami’ might sound funny to us Indians, but in Japanese ‘Harami’ means pregnant.įor the pattern to be called ‘Bullish Harami’, the following has to happen: Bullish Harami is a 2-candle pattern, which can form on the chart after a short term downtrend.
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