A Bearish Harami Candlestick Pattern is a pattern that indicates a top when it is preceded by a price increase. It is a two-candle bearish reversal pattern. The first candle has a relatively large green body (bullish) and the second one has a smaller red body (bearish) that’s contained within the body of the first candle. This is also known as an 'inside day' pattern. The upper and lower shadow lines of the second candle are short and should also fall within the body of the first candle.
This combination tells us a number of things :
Just like the Bullish Harami pattern, a Bearish Harami pattern is a reversal pattern. It is an indication that the current existing upward trend (short or long term) is coming to an end and a negative trend reversal is imminent.
Please keep in mind that the pattern in itself is only an indication of a change of direction, but is by no means sufficient on its own to be used arbitrarily as an entry setup.
These are two additional elements that support the pattern. I repeat, it's important to remember that just the specific candlestick pattern alone is never sufficient to base a trade decision on.
The ChartMill Team