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Abandoned Baby
Belt Hold
Breakaway
Concealing Baby Swallow
Doji Star
Dragonfly Doji
Engulfing
Gravestone Doji
Hammer
Harami
Harami Cross
Homing Pigeon
Inverted Hammer
Kicking
Ladder Bottom
Mat Hold
Matching Low
Meeting Lines
Morning Doji Star
Morning Star
Piercing Line
Rising Three Methods
Separating Lines
Side by Side White Lines
Stick Sandwich
Three Inside Up
Three Line Strike
Three Outside Up
Three Stars In the South
Three While Soldiers
Tri Star
Unique Three River Bottom
Upside Gap Three Methods
Upside Tasuki Gap

Harami Cross
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Pattern: reversal
Reliability: low

Identification
A long black day is followed by a Doji which gaps opposite the trend and is completely engulfed by the real body of the first day.

The Psychology
In a downtrend or within a pullback of an uptrend, a long black day occurs. The next day’s gap up comes as a surprise to the shorts who thought they were sitting on a great position the previous day. The stock closes where it opens to signify a churn day with neither the bulls nor bears showing much force after the opening gap up. Reliability of the bullish Harami Cross is low, so a strong following day is needed for confirmation.



Here is an example of a stock forming bullish reversal candle at support…the most reliable place to appear. Your risk/reward is heavily in your favor if you play a Harami Cross at support rather than at what you think might be the end of a downtrend.



POOL presents anther desirable place to play a Harami Cross. The stock was in a steady uptrend and simply pulled back to the longer term support trendline and formed the bullish reversal (we consider it a continuation) candle. The white candle that follows is your entry.


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