Harami Pattern (Bullish/Bearish)
The Harami is a two-candle candlestick pattern where a large candle is followed by a smaller candle whose body is completely contained within the prior candle's body, historically signalling indecision and a potential pause or reversal in the prevailing trend.
The word Harami derives from the Japanese word for pregnant, referring to the visual appearance of a large candle containing a smaller one within its body. In technical analysis, the Harami represents a transition from a decisive, high-conviction directional move to a state of market indecision — the large first candle represents continuation, but the small second candle signals that the dominant side is losing conviction.
The Bullish Harami appears after a downtrend. A large bearish candle is followed by a small bullish candle that opens and closes within the prior candle's body. This pattern has historically been observed at areas of support in Indian equities, particularly on daily charts during corrections within broader uptrends. It does not necessarily mean an immediate reversal, but rather that selling pressure is diminishing.
The Bearish Harami appears after an uptrend. A large bullish candle is followed by a small bearish candle contained within its body. In Indian markets, this pattern has historically been observed at resistance levels during earnings-driven rallies, where institutional profit-taking begins to counter retail buying momentum.
A useful variation is the Harami Cross, where the second candle is a Doji rather than a regular small candle. The Harami Cross is considered a stronger signal historically, as the Doji indicates complete indecision rather than merely reduced momentum. The Three Inside Up and Three Inside Down patterns are essentially Harami formations with an added confirmation candle, and traders typically wait for that confirmation before acting on the signal.
In Indian derivatives markets, Harami patterns on intraday timeframes — particularly 15-minute and 30-minute charts of Nifty 50 and Bank Nifty — have historically been used by short-term traders to identify potential reversal zones during trending sessions. The pattern is more reliable when it forms near key pivot points derived from the prior session or near important moving averages.
A key distinguishing characteristic of a valid Harami is that the second candle must be entirely within the first candle's body, not merely its range. This makes it distinct from an inside bar pattern, which uses the full high-low range. Body containment is the defining criterion, and this specificity is what gives the pattern its historical identity in Japanese candlestick literature.