Bullish Harami: Bullish Reversal Pattern

Bullish Harami is a bullish reversal pattern. It is characterized by a large black candle, followed by a small white candle. The white candle is contained completely within the previous black candle.

The pattern appears in a downtrend. A long black candle is seen, which is followed by a small white candle, which is completely engulfed by the previous day candle. Shadows need not be compulsorily engulfed, but real body should be. The market is entering in an indecision or congestion phase post Bullish Harami. Strategy: A confirmation on the third day in the form of a white candle, large gap up or a higher close makes sure that the downtrend has reversed. Long positions can be initiated post confirmation.