Showing posts with label bullish-harami-cross. Show all posts
Showing posts with label bullish-harami-cross. Show all posts

BEARISH HARAMI CANDLESTICK PATTERN

  BEARISH HARAMI CANDLESTICK PATTERN

Bearish Harami
www.FurtherGrow.in






In up trends, the harami consists of a large green candle followed by a small green or red candle (usually red) that is within the previous session’s large real body.


Description               

Bearish Harami is a two candlestick pattern composed of small red real body contained within a prior relatively long green real body. The body of the first candle is the same color as that of the current trend. The open and the close occur inside the open and the close of the previous day. Its presence indicates that the trend is over.


Criteria

1. The first candle is green in color; the body of the second candle is red.

2. The second day opens lower than the close of the previous day and closes higher than the open of the prior day.

3. For a reversal signal, confirmation is needed. The next day should show weakness.

4. The uptrend has been apparent. A long green candle occurs at the end of the trend.

Signal Enhancements

1. The reversal will be more forceful, if the green and the red candle are longer.

2. The lower the red candle closes down on the green candle, the more convincing that a reversal has occurred, despite the size of the red candle.

Let's See Example In a Chart


www.FurtherGrow.in

Pattern psychology

The bears open the price lower than the previous close, after a strong uptrend has been in effect and after a long green candle day. The longs get concerned and start profit taking. The price for the day ends at a lower level. The bulls are now concerned as the price closes lower.
                                                                   It is becoming evident that the trend has been violated. A weak day after that would convince everybody that the trend was reversing. Volume increases due to the profit taking and the addition of short sales.


Thanks...
Share:

BULLISH HARAMI CANDLESTICK PATTERN

BULLISH  HARAMI CANDLESTICK PATTERN

 

Bullish Harami
www.FurtherGrow.in

A candlestick chart pattern in which a large candlestick is followed by a smaller candlestick whose body is located within the vertical range of the larger body. In downtrends, the harami
consists of a large red candle followed by a small green or red candle (usually green) that is within the previous session’s large real body. This pattern signifies that the immediately preceding trend may be concluding, and that the bulls and bears have called a truce.

Description

The Harami is a commonly observed phenomenon. The pattern is composed of a two candle formation in a down-trending market. The color first candle is the same as that of current trend. The first body in the pattern is longer than the second one. The open and the close occur inside the open and the close of the previous day. Its presence indicates that the trend is over. The Harami (meaning “pregnant” in Japanese) Candlestick Pattern is a reversal pattern. 

                                                                         The pattern consists of two Candlesticks. The first candle is red the existing trend. The second candle, the little belly sticking out, is usually green in colour but that is not always the case. Magnitude of the reversal is affected by the location and size of the candles. 

Formation

1. The first candle is red in body; the body of the second candle is green.

2. The downtrend has been evident for a good period. A long red candle occurs at the end of the trend.

3. The second day opens higher than the close of the previous day and closes lower than the open of the prior day.

4. Unlike the Western “Inside Day”, just the body needs to remain in the previous day’s body, where as the “Inside Day” requires both the body and the shadows to remain inside the previous day’s body.

5. For a reversal signal, further confirmation is required to indicate that the trend is now moving up.


Signal Enhancements


1. The reversal will be more forceful if the red candle and the green candle are longer.

2. If the green candle closes up on the red candle then the reversal has occurred in a convincing manner despite the size of the green candle.

See Example In a Chart`

Bullish Harami Candlestick In a Chart
www.FurtherGrow.in

 

Pattern psychology

After a strong down trend has been in effect and after a selling day, the bulls open at a price higher than the previous close. The short’s get concerned and start covering. The price for the day finishes at a higher level. This gives enough notice to the short sellers that trend has been violated. A strong day i.e. the next day would convince everybody that the trend was reversing. 

                                                               Usually the volume is above the recent norm due to the unwinding of short positions. When the second candle is a doji, which is a candle with an almost non-existent real body, these patterns are called “harami crosses.” They are however less reliable as reversal patterns
as more indecision is indicated.




Thanks... 
Share: