Harami Cross

Harami Cross

On a Japanese Candlestick chart, a two day reversal pattern that is the same as the Harami, except that the second day is a Doji.


This first possible version of this formation is characterized by a long blue day followed by a doji cross that falls within the body of the previous day's candle. Up to this point the formation matches the bearish Doji Star (see above). The doji illustrates a light day of trading where the open and the close are at the same price. A day of uncertainty after a large bullish move suggests bulls may have lost control of the market. Candlestick analysts will watch for bearish moves in the following days.

In non-FX markets gaps that allow the doji to occur deep within the body of the first day's candle are typical - But such gaps are just not possible in Foreign Exchange Markets. Because the close of the first day would match the open of the second day, in the Forex Market this formation should look more like a Hanging Man candle.
This formation is very similar to the Bearish Engulfing formation, except that the move does not trade below the blue candle's body. Because Harami sellers are not able to drive price down more than in the Bearish Engulfing formation, this patterns offers a weaker signal.

In range bound markets this patterns occurs far more frequently with little significance. But if this formation occurs after a protracted bull move analysts will put attach greater significance to it.