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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Bullish Harami

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Market
Industrials (^DJI):
Transports (^DJT):
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Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 05/26/2017
21,080 -2.67 0.0%
9,176 12.36 0.1%
720 -0.08 0.0%
6,210 4.93 0.1%
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Tom's Targets    Overview: 05/15/2017
21,400 or 20,450 by 06/01/2017
9,500 or 8,700 by 06/01/2017
730 or 700 by 06/15/2017
6,350 or 6,000 by 06/01/2017
2,450 or 2,375 by 06/15/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The bullish harami functions much like the bearish one: about randomly. It is supposed to be a bullish reversal in theory, and testing shows that it actually works that way, too, but only 53% of the time. With a frequency rank of 25, you can find it as often as canned goods in a grocery store. The overall performance rank is 38th, where 1 is best out of 103 candles, so it shows mediocre performance after the breakout.

Bullish Harami Important Results

Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 53% of the time
Frequency rank: 25
Overall performance rank: 38
Best percentage meeting price target: 69% (bull market, up breakout)
Best average move in 10 days: 4.05% (bear market, up breakout)
Best 10-day performance rank: 45 (bear market, up breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal bullish harami candlestick
Bullish Harami
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Bullish Harami Discussion

The bullish harami candlestick functions almost randomly with reversals taking a slight edge over continuations by 53% to 47%. That means you probably can't guess the breakout direction with any accuracy. The frequency rank is 25, which means the candle pattern should be plentiful in a historical price series. The overall performance rank of 38 is decent but not outstanding.

The best average move 10 days after the breakout is a rise of 4.05% in a bear market. I consider moves of 6% or higher to be good. The move also gives a 10-day performance rank of 45, which is mid list between 1 (best) and 103 (worst).

Bullish Harami Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternDownward.
ConfigurationLook for a tall black candle in a downward price trend. The next day a white candle should be nestled within the body of the prior candle. Ignore the shadows. The tops or bottoms of the bodies can be the same price, but not both.
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Bullish Harami: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. Bullish harami candles that appear within a third of the yearly low perform best -- page 385.
  2. Select tall candles -- page 386.
  3. Trade bullish harami as part of a downward reversal in an up trend -- page 387-388.

Bullish Harami Example

The bullish harami candlestick on the daily scale

This bullish harami, circled in red, appears as a reversal in a short term downtrend. What strikes me first about this picture is the wonderful looking triple top chart pattern. The three peaks (1, 2, and 3) beginning in February near the same price are bearish and price drops after the pattern completes, as predicted by the pattern.

The bullish harami doesn't have much to reverse, does it? The tall black candle speaks of a continued downward price trend but the next day, a white candle appears. The body of the white candle is inside the body of the black candle.

In this example, the bullish harami functions as a bullish reversal of the downtrend when price breaks out upward. However, overhead resistance setup by the prior two peaks stop the upward trust and price collapses again.

-- Thomas Bulkowski

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See Also

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Rehab is for quitters.