Bullish/Bearish Engulfing Pattern

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.