Leavitt Brothers: Education - Candle Stick Patterns

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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

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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