Quick quiz: what is a "bearish harami?"
A) a famous anime character
B) a type of sushi involving "bear fish"
c) an experimental electronic band from Munich
d) a signal in technical trading
The answer is (D), though we could definitely go for some bear fish right now.
Technical analysis in financial trading involves looking at the trading pattern for an instrument (like a stock) and drawing conclusions about where it will likely go based on recent trends.
Okay, with that in mind, now to a brief primer on a particular kind of stock chart. There are several ways to present a trading chart. One of these ways is known as a "candlestick," wich represents each individual trading period (normally each day) as a vertical line and an overlayed box. It looks a little like a shish kebab held point up: the stick is the line and the chicken/steak/shrimp/veggies stand in for the box.
In the candlestick chart, the top of the line represents the highest price that was reached during the trading period. The bottom of the line represents the low. The box represents the distance traveled from the open of the market to the close. A green or white box means the stock (or whatever) closed higher, where the bottom of the box is the opening price and the top is the closing price. A red or black box means the stock closed lower, where the bottom of the box represents the close and the top represents the open.
All right, now to Bearish Harami. This is a particular pattern with a candlestick chart. It is marked by a "large candle" followed by a "short candle." Basically, the first day of trading saw the stock move a long distance. The second day saw a very short distance, with the entire length of the second day being within the bounds of the previous day (it had a lower peak and a higher low).
A Bearish Harami will have a gaining session (a green or white candle) as the first day and a losing session (a red or black candle) as the second day. This often suggests that stock that has been rising recently is ready to stall and maybe move back to the downside.
There's also a Bullish Harami, which has a losing session followed by a gaining session. This potentially signals the stock has completed a downtrend and is ready to stabilize.
Related or Semi-related Video
Finance: What is a Bearer Bond, or Beare...20 Views
Finance a la shmoop... what is a bearer bond or bearer stock alright you know
that saying possession is nine-tenths of the law
right well that's how bearer bonds and stocks work if you have the paper [Man presenting a bond]
representing the bond or stock aka the bond or stock certificate itself in your
hot little hands or wallet well then you own the bond or stock whether you stole
it or bought it or you know 3D printed it...In bearer bonds and
stocks there's no record or tracing of who bought or owned the bond or stock
sort of the opposite of how Bitcoin works and because of this non tracing [Money in a laundry machine]
and the ease with which money could be laundered for our kindly loving
terrorist friends bearer bonds and stocks are not very common today because
investors simply don't like the idea that their precious assets can be stolen [Thief running from police with money]
and then used to you know match plaid with stripes to counter this anonymity
most securities are in fact registered meaning that ownership is filed
officially with a brokerage or an issuer ie the company itself so that money can [A tracker appears]
be tracked and well taxed all over the world and note that one way bearer bonds
or stocks are dealt with in the fashion realm is to you know simply get rid of
the E don't look....[Man walking on a catwalk with no clothes]
Up Next
What is the maturity of a bond? Maturity refers to the time when an investment ends. When maturity happens, the investor is either on the hook for...