Bullish Harami Cross Pattern is a doji preceded by a long black real body. The Bullish
Harami Cross Pattern is a major bullish reversal pattern. It is more significant than a
regular Bullish Harami Pattern.
Recognition Criteria:
1. Market is characterized by downtrend.
2. Then we see a long black candlestick.
3. Long black candlestick is followed by a doji completely engulfed by the real body
of the first day. The shadows (high/low) of the doji may not be necessarily contained
within the first black body, though it's preferable if they are.
Explanation:
The Bullish Harami Cross Pattern is a strong signal of disparity about the market’s
health. During a downtrend, the heavy selling reflected by a long, black real body; is
followed by a doji next day. This shows that the market is starting to severe itself
from the prior downtrend.
Important Factors:
The Bullish Harami Pattern is not a major reversal pattern, however the Bullish
Harami Cross Pattern is a major upside reversal pattern. Short traders will not be
wise to ignore the significance of a harami cross just after a long black candlestick.
Harami crosses point out to the bottoms.
A third day confirmation of the reversal is recommended (though not required) to
judge that the downtrend has reversed. The confirmation may be in the form of a
white candlestick, a large gap up or a higher close on the next trading day.
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