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Candlestick Pattern 4

Thursday, February 19, 2009 | Labels: , , | |

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(4) Bullish Harami Cross

Bullish Harami Cross Pattern is a doji preceded by a long black real body.
The BullishHarami Cross Pattern is a major bullish reversal pattern. It is more significant than a regular Bullish Harami Pattern.

Recognition Criteria:

1. Market is characterized by downtrend.
2. Then we see a long black candlestick.
3. Long black candlestick is followed by a doji completely engulfed by the real body of the first day. The shadows (high/low) of the doji may not be necessarily contained within the first black body, though it's preferable if they are.

Explanation:

The Bullish Harami Cross Pattern is a strong signal of disparity about the market’s health. During a downtrend, the heavy selling reflected by a long, black real body; is followed by a doji next day. This shows that the market is starting to severe itself from the prior downtrend.

Important Factors:

The Bullish Harami Pattern is not a major reversal pattern, however the Bullish
Harami Cross Pattern is a major upside reversal pattern. Short traders will not be wise to ignore the significance of a harami cross just after a long black candlestick.
Harami crosses point out to the bottoms.


A third day confirmation of the reversal is recommended (though not required) to
judge that the downtrend has reversed. The confirmation may be in the form of a
white candlestick, a large gap up or a higher close on the next trading day.

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