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Bearish Harami Cross Pattern is a doji preceded by
a long white real body. The Bearish Harami Cross Pattern
is a major reversal pattern and is more significant
than a regular Bearish Harami Pattern.
Recognition Criteria:
1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a doji completely engulfed by the real
body of the first day on the second day. The shadows (high/low)
of this Doji do not have to be contained within the first,
though it's preferable if they are.
Explanation:
The Bearish Harami Cross Pattern is a sign of disparity
about the market’s health. Market is bullish and
strong buying continues as evidenced by the long, white
real body but then we see the doji. This shows that
the market may not continue in uptrend.
Important Factors:
While the Bearish Harami Pattern is not a major reversal
pattern, the Bearish Harami Cross Pattern is a major
downside reversal pattern. If a harami cross appears
after a long white candlestick, longs should take notice
of it since Harami Crosses call tops very effectively.
A confirmation on the third day is required to be sure
that the uptrend has reversed. This confirmation may
be in the form of a black candlestick, a large gap down
or a lower close on the third day.
