BEARISH HARAMI
CROSS
| Type: | Reversal |
| Relevance: | Bearish |
| Prior Trend: | Bullish |
| Reliability: | Medium |
| Confirmation: | Recommended |
| No. of Sticks: | 2 |
Bearish Harami Cross Pattern is a doji preceded by a long white real body. The Bearish Harami Cross Pattern is a major reversal pattern and is more significant than a regular Bearish Harami Pattern.
Recognition Criteria:
1. Market is characterized by uptrend.2. We see a long white candlestick in the first day.
3. Then we see a doji completely engulfed by the real body of the first day on the second day. The shadows (high/low) of this Doji do not have to be contained within the first, though it's preferable if they are.
Explanation:
The Bearish Harami Cross Pattern is a sign of disparity about the market’s health. Market is bullish and strong buying continues as evidenced by the long, white real body but then we see the doji. This shows that the market may not continue in uptrend.
Important Factors:
While the Bearish Harami Pattern is not a major reversal pattern, the Bearish Harami Cross Pattern is a major downside reversal pattern. If a harami cross appears after a long white candlestick, longs should take notice of it since Harami Crosses call tops very effectively.
A confirmation on the third day is required to be sure that the uptrend has reversed. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the third day.