Granthara04.03.05Harami and harami cross

Every price in Part 04 comes from an unnamed vegetable market and is a teaching example. Nothing here is a quote, a recommendation, or a record of any listed company.

04.03.05 · Harami and harami cross

PreviouslyEngulfing is one body swallowing the one before it and closing the other way.

The same sentence, read backwards.

Rahul asks Lakshmi what she would have called Thursday and Friday if they had happened the other way round. She does not redraw anything. She points at the same two boards, reads them right to left, and gives them a different name.

Nothing is resized and nothing is redrawn. Only the order changes, and the name changes with it.

Updated

0
numbers that differ between an engulfing and its harami
Part 04 · Reversal Patterns
  1. 04.03.01 Doji family: standard, long-legged, dragonfly, gravestone
  2. 04.03.02 Hammer and hanging man
  3. 04.03.03 Inverted hammer and shooting star
  4. 04.03.04 Bullish and bearish engulfing
  5. 04.03.05 Harami and harami cross
  6. 04.03.06 Piercing line and dark cloud cover
  7. 04.03.07 Morning star and evening star
  8. 04.03.08 Tweezer tops and bottoms
  9. 04.03.09 Doji stars and the abandoned baby
  10. 04.03.10 Three inside up and three inside down
  11. 04.03.11 Three outside up and three outside down
  12. 04.03.12 Tristar, two crows, and the upside-gap variant
0 of 12 read
Learn

Containment has a direction in time

04.03.04 measured one thing: whether one body covers another. That measurement says nothing about which came first — and which came first is the whole of this lesson.

A harami is the same containment running the other way: a large body, then a small one sitting entirely inside it. The word is old Japanese for pregnant, which is the picture — a big body carrying a small one.

So engulfing and harami are not two relationships to learn. They are one relationship with two reading directions, and a reader who knows the first already knows the second.

See it

The same two boards, in the other order

Press each. No price changes anywhere; the sessions simply arrive in the opposite sequence.

Eight numbers in total, and all eight are identical in both panels. Only their order differs.

Learn

What the reversal costs you

It is worth being precise about what swapped. In the engulfing, the second session was the large one — the most recent thing that happened was decisive. In the harami, the second session is the small one, and the most recent thing that happened was a session that went almost nowhere.

That is why the two carry opposite reputations in the literature, and it is also why both are described there as reversal patterns rather than continuations. Granthara reports the geometry and declines the prediction: a harami records a large session followed by a quiet one that stayed within it, and that is the end of what the four-and-four numbers support.

The engine Granthara checks its own examples with asks for one thing more than pure containment: the inner body must be no more than half the outer one. That is a convention, like every threshold in this Part, and different books draw it differently.

Engulfing and harami are one relationship read in two directions. Learn containment once and you have both.

Learn

The cross

Shrink the inner body far enough and it stops being small and becomes effectively nothing: the second session's first and last bids are the same price. A harami whose inner candle is a doji — the strict case from 04.03.01 — is called a harami cross.

It is not a new pattern. It is the same containment with the inner body at its limit, in exactly the way 04.02.03 described the doji as the strict case of a small body.

And as with every family in this chapter, the prior trend supplies the reversal name: after a rise it is read one way, after a fall the other, and inside a flat stretch it is a large session followed by a still one.

The same eight numbers, twice
Large board
₹29.20 · ₹30.40 · ₹29.10 · ₹30.30
Small board
₹30 · ₹30.10 · ₹29.40 · ₹29.50
Small first, large second
bullish engulfing
Large first, small second
bearish harami
Prices changed between the two
none
½the inner body's limit, by convention
0redrawing needed to change the name
Try it

A large rising body is followed by a small falling body that sits inside it. The market has been falling for a fortnight. What is on the board?

Try it

Which relationship is it?

Large body first, small body inside it second
Small body first, large body covering it second
A large body, then a doji inside it
A tired small session, then one that covers it and closes the other way
A wide session, then a still one that never leaves its body

Lakshmi, asked which is the stronger signal"One of them is a big day then a small one. The other is a small day then a big one. I have seen both go every way there is."

Containment all the way through, and containment all the way back. The next lesson asks the obvious remaining question: what about the sessions that go part of the way?

Remember

Harami is engulfing in reverse — the same containment with the large body first and the small one inside it — so the two are one relationship read in opposite directions, and shrinking the inner body to a doji makes it a harami cross rather than a new pattern.

Everything this chapter has told you, in order

  1. 04.03.01Open and close nearly meet; shadows and context complete the picture.
  2. 04.03.02One shape, two names: the trend that came before it supplies the name.
  3. 04.03.03Flip the shape and the rule is unchanged: the trend before it supplies the name.
  4. 04.03.04Engulfing is one body swallowing the one before it and closing the other way.
  5. 04.03.05Harami is engulfing in reverse: one relationship read in two directions.
Next
04.03.06 — Piercing line and dark cloud cover

Next: the sessions that only go part of the way, and the line somebody drew.