This is s two candlesticks pattern which could be either bullish or bearish
depending on the combination of the prior and subsequent candlesticks
development. In a downtrend, after a long black-bodied candlestick hitting a new
low, the second candlestick has a small white body and is completely confined
within the range of the previous candle. The Japanese word ‘Harami’ means
pregnant, the pattern itself looks like a woman carrying a baby (needs some
imaginations). The subsequent development is also important in order to
provide confirmation, the candlesticks after the ‘Harami’ should start turning
upwards, which means it should be followed by series of white candles.
The second candlestick could appear in different forms such as doji
Bullish Engulfing Pattern
This is a reversal pattern which can be bearish or bullish, when it appears at the
end of a downtrend, it would be a bullish engulfing pattern. The pattern starts
with a small body candlestick, then followed by a candlestick whose body
completely engulfs the previous candle’s body as buyers outnumber the sellers,
this would reflect in the chart by a long white real body candlestick.
Again this pattern needs confirmation and the long white candle should be
followed by series of white candlesticks to confirm a low formation.