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Bullish/Bearish Engulfing Pattern

Technical Analysis

A two-candle reversal signal where one candle's body fully engulfs the prior candle's body, in either a bullish or bearish direction.

A bullish engulfing pattern is a two-candle reversal signal where a large up candle completely "engulfs" the body of the prior down candle, suggesting buyers have overwhelmed sellers. A bearish engulfing pattern is the mirror image at the top of an uptrend — a large down candle swallowing the prior up candle's body. Engulfing patterns carry more weight when they appear at a significant support or resistance level, rather than in the middle of an unremarkable price range.

Related terms

Doji Candlestick →Support & Resistance →

More in Technical Analysis

Relative Strength Index (RSI)Moving Average Convergence Divergence (MACD)Bollinger BandsMoving Average (SMA & EMA)Golden Cross / Death CrossStochastic OscillatorAverage True Range (ATR)Average Directional Index (ADX)Parabolic SARIchimoku CloudFibonacci RetracementPivot Points

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