The Harami is a two-candle pattern where the second candle is completely contained within the first candle's body. It signals a pause in the current trend — and when it appears at a key level, it is a high-probability warning that a reversal is developing.
What Is a Harami Pattern?
The word "Harami" comes from Japanese and means "pregnant" — the small second candle is visually "contained" inside the large first candle like a child inside a mother. It is a two-candle reversal signal:
- Candle 1 (Mother candle): A large candle in the direction of the current trend — big green in an uptrend, big red in a downtrend.
- Candle 2 (Baby candle): A small candle whose entire body is within the body (not just the range) of Candle 1. It can be either bullish or bearish.
The key distinction between a Harami and an Inside Bar: the Harami requires the second candle's body to be inside the first candle's body. The Inside Bar requires the entire candle (including wicks) to be inside the previous candle's full range. The Harami is a stricter, more specific signal.
Bullish Harami vs Bearish Harami
- Bullish Harami: Appears at the bottom of a downtrend. Candle 1 is a large red candle. Candle 2 is a small candle (green preferred) whose body is completely inside Candle 1's body. Signals that selling momentum is losing strength.
- Bearish Harami: Appears at the top of an uptrend. Candle 1 is a large green candle. Candle 2 is a small candle (red preferred) whose body is within Candle 1's body. Signals buyer exhaustion at resistance.
- Harami Cross: When Candle 2 is a Doji (open = close) — an even stronger signal. The complete indecision of the Doji inside the large trend candle is a powerful warning of reversal.
Quality Factors for High-Probability Haramis
- Location: At a key support (bullish) or resistance (bearish) level — PDH, PDL, swing high/low, supply/demand zone. A Harami in the middle of a range is low probability.
- Mother candle size: The larger the first candle, the more significant the reversal signal when the second candle is tiny in comparison.
- Baby candle position: A baby candle that forms near the upper end of the mother candle (bullish Harami) shows buyers pushing back from a low point — stronger signal.
- Volume: Volume typically declines on the second (baby) candle — confirming that the trend's momentum is fading.
- Confirmation: Always wait for the candle after the Harami to confirm direction before entering.
Harami Trade Setup — Complete Rules
- Bullish Harami entry: Above the high of the baby candle (Candle 2), after a confirmation candle closes bullish above the Harami.
- Stop loss: Below the low of the mother candle (Candle 1) — the lowest point of the two-candle pattern.
- Target: Previous swing high, PDH, or next resistance above.
- Bearish Harami entry: Below the low of the baby candle after bearish confirmation.
- Stop: Above the high of the mother candle.
- Target: Previous swing low, PDL, or next support below.
Harami on Nifty — When to Watch
On Nifty, the Harami forms most reliably in these situations:
- After a large gap-up or gap-down day: The gap creates the large mother candle. The following session's indecision forms the baby candle. This is a classic post-gap Harami setup.
- At round numbers: A large trending candle into 24,000 / 24,500 / 25,000 followed by a small inside candle is a high-probability Harami at round number resistance.
- On expiry day in Bank Nifty: The large morning directional candle followed by a small consolidation candle frequently creates a Harami that precedes the midday chop period.
- On the 15-minute chart at PDH/PDL: A large 15-min candle into PDH followed by a tiny inside candle = Harami. Watch for the breakout or reversal from the baby candle's range.
Context: Nifty in 3-week uptrend. Approaches weekly resistance at 24,500.
Monday: Large green daily candle. Opens 24,280, closes 24,470. Body: 190 points. Strong bull candle. Volume above average.
Tuesday: Opens 24,475. Trades between 24,460 and 24,490. Closes 24,472. Body: 3 points — a near-Doji. Entire body inside Monday's body. Harami Cross confirmed ✅ Volume 50% below Monday.
Confirmation (Wednesday): Opens 24,465, closes 24,310. Large bearish candle. Reversal confirmed ✅
Entry: Sell below 24,305 (Wednesday close). Stop: 24,495 (Tuesday high). Risk: 190 points.
Target: 24,050 (previous swing low). Reward: 255 points. R:R: 1:1.34.
On the Nifty daily chart, find the last 5 large trend candles (any candle with a body larger than 200 points). Check the candle that follows each one — is it a Harami? At what level did it appear? This pattern-spotting exercise will develop your eye for Harami setups quickly. Read next: Marubozu Candlestick: Strong Momentum Signal on NSE.