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The Harami Candlestick Screen is the 1st in the series: >Japanese Candlestick Trading: Stock Screens for 15 Candlestick Patterns .

Bearish Harami & Bullish Harami

 Another classic candlestick pattern, “Harami” is taken from the Japanese word for “pregnant”. According to traditional Japanese Candlestick Trading texts, the first candlestick with a large real body is “the mother” and the small bodied candlestick is “the baby”. Hence, Harami canldes are sometimes known as pregnant candles.

The appearance of Harami is an indicator which marks the reversal or slowing (sideways movement) of an existing trend.

There are two types of Harami patterns that traders need to familiarize themselves with, bearish, and bullish.

Bearish Harami:
The appearance of Bearish Harami is an indication that the current uptrend is in danger of reversal. All Harami share the same characteristics. A candlestick with a long real body is followed by a candlestick with a small real body that is engulfed by the previous days price action. It is not necessary, but more ideal, for the wicks to be contained within the first days real body.

Although not required, Bearish Harami are most reliable under the following circumstances:

  • The market is trading in an uptrend
  • The mother (first) candlestick is long and white (bullish)
  • The daughter (second) candlestick is small and black
  • The smaller the daughter candlestick, the more reliable the pattern
  • The pattern is most reliable if the daughter candlestick is a doji, and is called a Harami Cross

Bullish Harami:
Bullish Harami indicate the reversal of an existing downtrend. All Harami share the same characteristics. A candlestick with a long real body is followed by a candlestick with a small real body that is engulfed by the previous days price action. It is not necessary, but more ideal, for the wicks to be contained within the first days real body.

Although not required, Bullish Harami are most reliable under the following circumstances:

  • The market is trading in an downtrend
  • The mother (first) candlestick is long and black (bearish)
  • The daughter (second) candlestick is small and white
  • The smaller the daughter candlestick, the more reliable the pattern
  • The pattern is most reliable if the daughter candlestick is a doji, and is called a Harami Cross

Trading Harami

Reliability
Harami patterns should not be traded in isolation as reliable indicators. They should be utilized in combination with trend following techniques as well as other Western technical analysis indicators. The appearance of Harami at a long term support or resistance point can make excellent entry points.

Running The Harami Stock Screen

The screening code presented below is executed using StockFetcher 2.0

Bearish Harami
set{tail_size,open – low}
set{head_size,high minus close}
set{body_bottom,min(open,close)}
set{body_top,max(open,close)}
set{body_size,abs(body_top minus body_bottom)}

Show stocks where close is above 5
and average volume(30) is above 250000 do not draw average volume(30)
and MA(20) has been above MA(50) for at least 10 days
and MA(50) is rising
and body_size 1 day ago is 50% greater than CMA(body_size,30)
and close 1 day ago is above open 1 day ago
and body_size is 50% less than body_size 1 day ago
and body_top is less than body_top 1 day ago
and body_bottom is greater than body_bottom 1 day ago
and open is above close

Bullish Harami
set{tail_size,open – low}
set{head_size,high minus close}
set{body_bottom,min(open,close)}
set{body_top,max(open,close)}
set{body_size,abs(body_top minus body_bottom)}

Show stocks where close is above 5
and average volume(30) is above 250000 do not draw average volume(30)
and MA(20) has been below MA(50) for at least 10 days
and MA(50) is falling
and body_size 1 day ago is 50% greater than CMA(body_size,30)
and close 1 day ago is below open 1 day ago
and body_size is 50% less than body_size 1 day ago
and body_top is less than body_top 1 day ago
and body_bottom is greater than body_bottom 1 day ago
and open is below close

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