Bearish Harami

The Pattern

A Bearish Harami forms over two consecutive bars:

1. A long up-bar continues an existing uptrend.
2. A small down-bar opens below the prior close and closes above the prior open, with its entire body contained inside the prior bar’s body.

The shape is essentially a structural mirror of Bearish Engulfing: there, a large down-bar swallows a small up-bar, here, a small down-bar nests inside a large up-bar.

The Story Behind It

Classical analysts treat Harami as a softer reversal signal than Engulfing on either side. The bullish session was strong, but the next session failed to extend it. The inside-bar relationship means sellers did not even test the prior high, let alone reverse the trend. That stalling is the news. Whether the stall becomes a reversal usually depends on what happens over the next few sessions.

In equity index futures the bearish side of every reversal pattern faces a structural headwind. Bearish Harami is no exception: the inside-bar stall after an up-bar is even less reliable in the indices than Bullish Harami is on the long side, since the dip-buy reflex frequently resumes the uptrend within the hold window.

When It Tends To Work

• After a sustained, multi-bar uptrend where the lack of follow-through on the inside bar is genuinely notable.
• When the prior up-bar is unusually long. The longer the bar being nested into, the more meaningful the stall.
• In ranging or topping markets where a single failed upside push often marks the actual high.

When It Tends To Fail

• In equity indices during strong bull regimes. The pattern fires but is often run over.
• When the inside bar is near the prior bar’s high. The pattern reads better when the inside bar prints near the lower half of the prior body.
• After news-driven up-bars where the next session’s small range is just a digestion bar, not a regime change.

How This Strategy Trades It

Enter short at the close of the inside bar. Hold for hold_bars sessions (default 5), then flatten unconditionally.

Related Patterns

• Bullish Harami: the directional mirror.
• Bearish Engulfing: the inverted-size version, large down-bar wraps a small up-bar instead of the other way around.
• Dark Cloud Cover: a different two-bar reversal idea, partial body penetration rather than inside-body containment.

Try It Yourself

The default preset uses 1-contract sizing on NQ daily bars. The form lets you change the contract, timeframe, hold length, and contract count.