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The Bearish Harami is a Japanese candlestick signal that forecasts the reversal of a bull market and initiation of a bear market. It has two candlesticks. The first is long and white and the second is shorter and black. The second candlestick is positioned with its top lower than the top of the first and its bottom higher than the bottom of the first. Japanese Candlestick Signals Japanese candlestick signals like the Bearish Harami help traders see the changes in market sentiment which in turn lead to price changes. The signal is useful in trading stocks, commodities, foreign currencies, and options on any of these. The Bearish Harami consists of two candlesticks. The first is larger than the second and the second is positioned so that its top is lower the than the top of the first and its bottom is higher than the bottom of the first. When this signal occurs in a well established upward trend it is an indicator of a downward reversal. The first candle is white which indicates an upward trading day. The second candle is typically black which indicates a downward day. The second day starts with a gap down from the close of the first day and trading for the day closes above the start of the first day. The Bearish Harami signal requires that the next day trade downwards in order to confirm the reversal from a bull to a bear market. If any of these aspects is missing traders are well advised to proceed with caution
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