Tweezers and Harami patterns

Tweezers

 Tweezers are  formed of two or more candlesticks with matching highs or lows. These are normally spotted at an extended uptrend or down trend signifying a reversal in either of the trends.

The first candle of a tweezers is the same as those in the current trend, for example if price is going long, then the first candlestick should be bullish. If price is going short, the first candle should be bearish while the second candlestick is of the opposite trend.

Tweezers Tops and Bottoms

Tweezers Bottoms

The Tweezers bottoms appears  at the end of an extended downtrend while the tweezers tops appear at an extended uptrend.

For the tweezers bottoms, a bearish candlestick forms first with a moderate shadow below and  the next candlestick is bullish with equal body length and shadow sharing the same lows as the first candlestick

The shadows of the candlesticks are of the equal length therefore have equal lows.

Tweezers tops

Tweezers tops is the opposite of the bottoms. It is made when the highs match and  it normally appears after an extended uptrend.

The first candlestick of  tweezers tops is bullish and the second candlestick is bearish sharing the same high. It signals a bearish reversal pattern. They are composed of real bodies, shadows or a doji.

Both candlesticks  have equal highs.

Tweezers bottoms appear at the end of an extended downtrend, and are formed when the lows match. Like tweezers tops, they are composed of real bodies, shadows or a doji. They should have the same lows.

What does a tweezers Top pattern on a chart mean?

When price is moving up, the formation of tweezers tops shows that buyers tried as much as possible to push prices high but the sellers appeared and pushed prices back closing as low as the open. The formation of the next bearish candlestick with the same high as the bullish candlestick, closing at the same point as the open of the candlestick shows great indecision  and equal power in the market which may lead to a change in trend.

The formation of  a large bearish candlestick after the tweezer tops becomes a confirmation that the bears/sellers have become stronger in the market and a likelihood of change in the market trend. 

 

The chart above shows an uptrend followed by a tweezers tops. If you can take a good look on the above chart you will see that the two candlestick patterns have the same highs. The formation of a large bearish candlestick after the pattern gave a confirmation for a sell signal. At this point we expect a probable change in the trend direction to the downside.

What does a tweezers bottom pattern on a chart mean?

When price is moving  down, the appearance of tweezers bottoms signifies, that there is fight for power between the buyers and the sellers (great indecision). The sellers try to push prices as low as possible but the buyers come in and push the prices back to close near the open. Formation of a next bullish candlestick having the same body and same shadow size as the low  signifies that there is still the presence of sellers in the market but they are losing to the buyers..

The formation of a next big bullish candlestick will become the confirmation of the change in the trend.

Take a look at the chart below.

From the above chart, the two candlesticks share the same low and same high and the close of the first candle is equal to the open of the second candle. The formation of a large bullish candlestick gave the confirmation for a change in trend direction.

The Harami

 The harami is the opposite of the engulfing pattern. It is sometimes called the harami cross. The first candlestick is large and the second is small. Almost the size of spinning tops or a doji.  There are two types;

Bullish Harami

These are two candlestick patterns that appear on a strong downtrend. It’s a combination of a large bearish candlestick with a small bullish candlestick sometimes a doji.

When this forms on a declining trend the formation of the small body or a doji shows the point of indecision in the market and the next candlestick to form gives a confirmation.

The Bearish Harami

The bearish harami forms at the end of an uptrend with a large bullish candlestick and a small candlestick.

A small bearish candlestick forming after a large bullish candlesticks shows loss of power by the bulls and point of indecision and the next candlestick gives a confirmation for trend reversal.

The appearance of a harami after a long down trend can lead to change in trend direction to the upside.  When in an uptrend, it can lead to trend reversal to the downside. This is illustrated as below. Take a look.

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