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Abandoned Baby
Advance Block
Belt Hold
Breakaway
Dark Cloud Cover
Deliberation
Doji Star
Dragonfly Doji
Downside Gap Three Methods
Downside Tasuki Gap
Engulfing
Evening Doji Star
Evening Star
Falling Three Methods
Gravestone Doji
Hanging Man
Harami
Harami Cross
Identical Three Crows
In Neck
Kicking
Meeting Lines
On Neck
Separating Lines
Shooting Star
Side By Side White Lines
Three Black Crows
Three Inside Down
Three Line Strike
Three Outside Down
Thrusting
Tri Star
Two Crows
Upside Gap Two Crows

Harami Cross
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Pattern: reversal
Reliability: moderate

Identification
A long white day is followed by a Doji that gaps down and is completely engulfed by the real body of the first day.

The Psychology
In an uptrend or within a bounce of a downtrend a long white day occurs. The next day's gap down comes as a surprise to bulls who thought they were sitting on a great position the previous day. Reliability of the bearish Harami Cross is better than that of the bearish Harami, but it is still on the low side. A weak following day is needed for confirmation.



Given the average reliability of the Harami Cross candle as a reversal pattern, you need to look at other indicators or be picky in only playing the pattern at resistance. Here CGNX formed a small head & shoulder top pattern with a bearish Harami Cross at the top of the right shoulder. That provided a low risk short entry because the prudent trade would exit immediately if a higher high was made.

 

 

 

 

 

 

 

 



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