A bullish harami forms when a large red candle is followed by a small candle of either colour whose body sits entirely within the prior red candle's range. Unlike an engulfing pattern, the second candle doesn't overpower the first — it simply shows the selling pressure has sharply contracted.
Why it matters
- —A moderate reversal signal — weaker than a bullish engulfing pattern, since the second candle doesn't actually overpower the first.
- —Best treated as an early warning to watch closely, rather than an immediate trade trigger on its own.
- —More meaningful after a sustained decline than after just one or two down days.
How to read it
| After an extended downtrend | Moderate bullish reversal signal |
| After only a brief decline | Lower-confidence signal |
| Followed by a confirming up candle | Strengthens the reversal case |