Harami Candlestick Pattern: Bullish & Bearish Guide

The Harami candlestick pattern is a two-candle formation that can signal a slowdown in the existing price trend and a possible reversal. It consists of a relatively large first candle followed by a much smaller second candle whose real body sits within the real body of the first candle.

The pattern can be bullish or bearish, depending on the trend that comes before it.

A Bullish Harami generally appears after a decline and may indicate that selling pressure is weakening. A Bearish Harami generally appears after an advance and may suggest that buying momentum is losing strength.

However, a Harami is not a guarantee that prices will reverse. It is better treated as a warning that momentum may be changing and then evaluated alongside price structure, support or resistance, volume, and other technical indicators.

What Is a Harami Candlestick Pattern?

A Harami is a two-candle candlestick pattern.

The first candle has a relatively large real body, while the second candle has a significantly smaller real body contained within the first candle's real body.

The word "Harami" comes from Japanese terminology and is commonly translated as "pregnant," referring to the visual appearance of the smaller candle sitting inside the larger candle.

The basic structure is:

1. A relatively large candle forms in the direction of the existing trend.
2. A smaller candle follows.
3. The second candle's open and close fall within the real body of the first candle.
4. The pattern appears after an established upward or downward move.
5. Traders then look for confirmation of whether the trend is actually reversing.

The exact appearance can vary because the second candle may be bullish, bearish, a spinning top, or a Doji depending on the version and interpretation.

If you're new to chart reading, it can help to first understand the broader types of candlestick patterns and how open, high, low, and close prices create individual candles.

How Does the Harami Pattern Work?

The basic idea behind a Harami is contraction in momentum.

Imagine a stock has been falling strongly. Sellers have been controlling the price, producing a large bearish candle. The next session produces a much smaller candle inside that previous body.

That smaller candle suggests that the strong directional movement has temporarily lost some momentum.

The same concept works in reverse during an uptrend. A large bullish candle followed by a small candle contained within it can indicate that buying pressure is becoming less decisive.

This is why a Harami should generally be interpreted as a potential change in market momentum, rather than a guaranteed reversal.

Candlestick analysis becomes more useful when combined with broader technical analysis rather than relying on one formation alone.

Bullish Harami Candlestick Pattern

A Bullish Harami generally forms after a downtrend.

Its typical structure is:

• The first candle is a relatively large bearish candle.
• The second candle has a smaller real body.
• The second candle's real body is contained within the first candle's real body.
• The formation appears after a decline.
• Subsequent bullish price action can provide confirmation.

The idea is that sellers were previously in control, but the second candle shows a significant reduction in the size of the price move.

This may indicate that selling momentum is weakening.

However, weakening selling pressure does not automatically mean buyers have taken control. Price could still resume its decline.

For a more focused explanation of this setup, see the Bullish Harami guide.

Example of a Bullish Harami

Suppose a hypothetical stock has been declining for several sessions.

On Day 1:

• Open: $100
• Close: $92
• Large bearish real body

On Day 2:

• Open: $95
• Close: $97
• Much smaller bullish real body

The second candle's real body falls inside the first candle's real body, creating a structure consistent with a Bullish Harami.

The pattern itself does not prove that the stock will rise. A trader may instead watch what happens during the following session.

If price moves higher and breaks an important nearby resistance level, the bullish interpretation may receive additional support.

Bearish Harami Candlestick Pattern

A Bearish Harami is the opposite setup.

It generally appears after an uptrend and may indicate that buying momentum is weakening.

The typical structure is:

• The first candle is a relatively large bullish candle.
• The second candle has a smaller real body.
• The second candle's real body sits within the first candle's real body.
• The formation appears after an advance.
• Subsequent bearish price action may provide confirmation.

For example, imagine a stock has moved from $80 to $100 over several sessions.

A large bullish candle pushes the price higher, but the next session produces a much smaller candle contained within the previous candle's body.

The smaller second candle may show that the strong upward momentum has paused.

If subsequent selling pushes the price below an important support level, the bearish interpretation may become more meaningful.

A Harami should still be considered in the context of the overall chart rather than treated as a standalone short-selling signal.

Bullish vs. Bearish Harami

Feature	Bullish Harami	Bearish Harami
Previous trend	Downtrend	Uptrend
First candle	Large bearish candle	Large bullish candle
Second candle	Smaller candle	Smaller candle
Main interpretation	Selling momentum may weaken	Buying momentum may weaken
Potential outcome	Upside reversal	Downside reversal
Confirmation	Bullish follow-through	Bearish follow-through
Main risk	Downtrend may continue	Uptrend may continue

The preceding trend is important. A two-candle formation that looks like a Harami in a sideways market may not carry the same meaning as one that appears after a sustained directional move.

How to Identify a Harami Candlestick Pattern

Use the following checklist when reviewing a chart.

1. Look for an established trend

First determine whether the market has been moving consistently upward or downward.

A Bullish Harami is generally evaluated after a decline, while a Bearish Harami is generally evaluated after an advance.

2. Find the large first candle

The first candle should have a relatively large real body compared with the second candle.

The first candle represents the strong directional movement that occurred immediately before the momentum contraction.

3. Check the second candle

The second candle should have a substantially smaller real body.

Its open and close should fall within the real body of the first candle.

The wicks may extend outside the first candle's body depending on the interpretation being used; the real-body relationship is the key feature.

4. Evaluate the surrounding price action

Don't stop after identifying the two candles.

Look at:

• Previous highs and lows
• Support
• Resistance
• Trend direction
• Trading volume
• Nearby moving averages
• Momentum indicators
• Recent price volatility

This broader context can help distinguish a meaningful setup from an isolated two-candle formation.

What Does a Harami Pattern Tell Traders?

A Harami primarily tells traders that the momentum behind the previous move may be changing.

It does not necessarily tell you exactly what happens next.

A Bullish Harami can indicate that sellers are losing momentum after a decline.

A Bearish Harami can indicate that buyers are losing momentum after an advance.

That distinction is important.

The pattern is not saying:

"The market will definitely reverse."

It is closer to:

"The previous directional momentum may be weakening."

That is why confirmation matters.

How to Confirm a Harami Pattern

Confirmation can come from subsequent price action or other technical evidence.

Some traders look for:

• A strong candle moving in the expected reversal direction
• A break above or below a relevant price level
• Support or resistance confirmation
• Increased trading volume
• Momentum indicator confirmation
• A change in market structure

For example, a Bullish Harami near established support followed by a strong bullish candle may provide more information than the same pattern appearing randomly in the middle of a range.

The opposite applies to a Bearish Harami near resistance.

Another useful approach is combining the pattern with price action trading concepts so the candle is interpreted within the broader structure of the market.

Harami vs. Harami Cross

A Harami Cross is a variation in which the second candle is a Doji rather than an ordinary small-bodied candle.

The Doji represents a session in which the opening and closing prices are very close, indicating greater indecision.

This creates a slightly different visual structure:

Regular Harami:

Large candle → small-bodied candle

Harami Cross:

Large candle → Doji

The Harami Cross is often discussed as a potentially stronger indication of indecision, but it should not automatically be assumed to produce a successful reversal.

You can learn more about this variation in the Harami Cross candlestick pattern guide.

Harami vs. Bullish Engulfing

Harami and Engulfing patterns have an important structural difference.

With a Bullish Harami, the smaller second candle is contained within the previous candle's real body.

With a Bullish Engulfing pattern, the second candle is larger and generally engulfs the previous candle's real body.

In simplified form:

Bullish Harami:

Large bearish candle → small candle inside

Bullish Engulfing:

Small bearish candle → large bullish candle engulfing it

This difference also reflects a different price-action story. A Harami suggests contraction or hesitation, while an Engulfing pattern suggests a stronger shift in the balance between buyers and sellers.

See the Bullish Engulfing pattern for a direct comparison.

Harami vs. Three Inside Up and Three Inside Down

The Three Inside Up and Three Inside Down patterns add a third candle to the basic Harami structure.

Three Inside Up generally starts with a bearish candle, followed by a smaller candle inside it, and then a bullish third candle that provides additional reversal confirmation.

Three Inside Down is the bearish counterpart.

This makes the three-candle formations useful when a trader wants additional confirmation beyond the initial two-candle Harami.

Investopedia describes Three Inside Up and Three Inside Down as more confirmatory versions of the Harami pattern.

You can explore the Three Inside Up pattern separately.

Using Volume With the Harami

Volume can provide additional context.

For example, if a large price move occurs on substantial volume and the following Harami develops as momentum contracts, traders may pay attention to whether volume expands again when price moves out of the pattern.

However, volume should not be treated as a guarantee.

A Harami accompanied by unusual volume can represent a contested market rather than a clean reversal.

The important question is whether subsequent price action confirms the interpretation.

Using RSI With the Harami

The Relative Strength Index, or RSI, can provide another layer of context.

For example, a Bullish Harami after a prolonged decline may attract more attention if RSI also indicates that downside momentum has weakened.

Likewise, a Bearish Harami following a strong advance may deserve additional attention if momentum is deteriorating.

Still, RSI and candlestick patterns measure different aspects of price behavior. They should complement one another rather than replace broader analysis.

For more information, see the RSI indicator trading guide.

Where Does a Harami Work Best?

A Harami can be more useful when it appears at a meaningful technical location.

Potentially relevant areas include:

• Established support
• Established resistance
• Previous swing highs
• Previous swing lows
• Trendlines
• Moving averages
• Important breakout levels

For instance, a Bullish Harami forming after a decline near established support may provide a more useful context than an identical formation appearing randomly during sideways trading.

Likewise, a Bearish Harami near established resistance may deserve closer attention.

The key is context rather than the candle alone.

Common Mistakes When Trading the Harami

Treating every Harami as a reversal

A Harami can signal hesitation without producing a full trend reversal.

The existing trend may simply pause before continuing.

Ignoring the preceding trend

The same two-candle appearance can have very different implications depending on whether the market was rising, falling, or moving sideways beforehand.

Entering before confirmation

Entering solely because the second candle completes can expose a trader to false signals.

Waiting for additional price-action evidence can help reduce premature decisions.

Confusing the pattern with an Engulfing pattern

The two formations have opposite structural characteristics.

Harami involves contraction into a smaller second body, while Engulfing involves expansion through the previous body.

Ignoring risk management

Even a convincing-looking setup can fail.

If a trader chooses to act on a technical setup, the potential loss should be considered before entering rather than after the trade moves against them.

Risk-management tools such as a predefined stop-loss and target can help establish those boundaries.

Relying on one indicator

Adding RSI, volume, moving averages, or other indicators does not guarantee a correct prediction.

Technical indicators can produce conflicting signals, so they should be interpreted within the broader market context.

Is the Harami Candlestick Pattern Reliable?

The Harami should not be considered a standalone high-confidence prediction tool.

Fidelity's technical-analysis material specifically notes that although the Harami is commonly regarded as a reversal pattern, it can break in either direction.

Historical testing also demonstrates why traders should be cautious about assigning a fixed success rate to candlestick patterns. Thomas Bulkowski's research, for example, found that some candlestick patterns do not behave consistently with their traditional bullish or bearish labels.

The practical takeaway is simple:

A Harami is a setup to investigate, not a guarantee to trade.

Its usefulness depends on the surrounding trend, price level, market conditions, confirmation, and risk management.

Harami Candlestick Pattern: Advantages and Limitations

Advantages	Limitations
Easy to recognize	Can produce false signals
Shows potential momentum change	Does not guarantee reversal
Works in bullish and bearish contexts	Requires trend context
Can be combined with other tools	Different traders may interpret confirmation differently
Useful for studying price action	Should not be used in isolation

Frequently Asked Questions

Final Takeaway

The Harami candlestick pattern is best understood as a sign that the momentum behind an existing trend may be losing strength.

A Bullish Harami generally develops after a decline and can point to weakening selling pressure. A Bearish Harami generally appears after an advance and can indicate weakening buying pressure.

The most important points are:

• It is a two-candle pattern.
• The second candle has a smaller real body.
• The second real body sits within the first candle's real body.
• The preceding trend determines whether the setup is bullish or bearish.
• A Harami does not guarantee a reversal.
• Confirmation and broader market context are important.
• Support, resistance, volume, and momentum indicators can provide additional context.
• Risk management remains important because the pattern can fail.

For anyone learning candlestick analysis, the Harami is useful not because it predicts the future with certainty, but because it helps identify moments when a strong directional move may be losing momentum.