Harami
Also called: bullish harami, bearish harami
A two-candle pattern where a small candle's body sits entirely inside the prior large candle's body — a sign the trend is losing steam.
Harami means 'pregnant' in Japanese: a large candle is followed by a small one whose body is contained within it. The shrinking range after a big move signals momentum is fading and the trend may pause or reverse.
A bullish harami appears after a downtrend (a small up candle inside a big red one); a bearish harami after an uptrend. It's the near-opposite of an engulfing pattern — here the second candle is the small one.
A harami is not the same as an inside bar. The harami compares bodies only, so the second candle's wicks may poke past the first candle's; an inside bar needs the second candle's whole high-low range inside the first, and ignores color.
How it has actually played out
- Bullish Harami: across 7,324 signals on US stocks in the last 150 days, price was higher a week later 44.9% of the time (-0.0 pts vs. an ordinary session) and higher a month later 42.4% (+1.3 pts).
- Bearish Harami: across 5,576 signals on US stocks in the last 150 days, price was lower a week later 54.9% of the time (+0.7 pts vs. an ordinary session) and lower a month later 59.5% (+0.9 pts).
Measured from the signal-day close, no stops or costs, versus every session of the same stocks over the same window. A base rate, not a prediction.
On StockSetups
StockSetups flags a harami when the last bar's body sits inside a larger prior body of the opposite color, and only in the right context: bullish after a downtrend, bearish after an uptrend. It's a confirmation clue, weighed with the chart pattern rather than traded alone.
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