An Inside Bar is a bar which is completely within the range of the preceding bar, indicating a period of indecision or consolidation. If an Inside Bar is found at the end of a prolonged downtrend and is located near a level of support, it can signal a possible reversal in trend. The Japanese Candlestick pattern called Harami is very similar, with a large candlestick followed by a smaller candlestick whose body is located within the vertical range of the larger body. The Bullish Harami occurs after a downtrend, with a red candlestick engulfing a small green candlestick, giving a sign of a possible bullish reversal in trend. So in this case of Alcoa (AA) on the daily chart we have both an Inside Bar and Bullish Harami. Let's see how it plays out next week, within the context of the broader recent selloff in stocks. Chart courtesy of Worden
Right, that's the logic; Chart courtesy of Worden Technically the bullish breakout case is stronger I think, but it is dampened of course looking at the broader context of the market we are in (S&P 500 has worst Thanksgiving week since 1932!)