The Bullish Harami is a two-candle pattern where a small bullish candle is contained entirely within the body of the preceding large bearish candle. “Harami” is Japanese for “pregnant” — the small candle is the baby, the large one the mother. It signals that the prior downtrend’s momentum is fading, though it requires confirmation.

How to Identify

• Appears at the bottom of a downtrend
• Candle 1: large bearish red candle (the “mother”)
• Candle 2: small bullish candle whose entire body fits within candle 1’s body
• Only the bodies matter — wicks of candle 2 may extend outside candle 1
• Smaller candle 2 relative to candle 1 = stronger signal
• Best when candle 2 body is ≤25% of candle 1’s body length

Market Psychology

After a strong bearish session, the next day’s range collapses dramatically — sellers couldn’t push price meaningfully lower, and buyers managed to close slightly higher. This stalling inside the prior candle’s range signals indecision and potential exhaustion of the downtrend. It’s a pause, not yet a reversal — confirmation required before acting.