Bearish Engulfing Candlestick
The Bearish Engulfing Candlestick is a powerful bearish reversal candle pattern.
It occurs in an uptrend signifying that the end of an uptrend is near and the beginning of a
downtrend is in progress.
It is so named as it engulfs the previous bullish candle.
Bearish Engulfing Candlestick Pattern
For the candlestick chart pattern to be confirmed as the Bearish Engulfing Candlestick following criteria must be fulfilled:
- This reversal pattern must occur in an uptrend.
- This reversal pattern must consists of two candles.
- The first day candle must be a full white (bullish) bodied candle. It must close higher than the previous high confirming an existing uptrend.
- The second day candle must be a full black (bearish) bodied candle, i.e. the close price must be lower than the open price.
- The opening price of the bearish engulfing candle may be higher than the close of the previous bullish candle but the closing price
of the bearish engulfing candle must be lower than the opening of the previous bullish candle.
The opposite is true for the case of the Bullish Engulfing Candlestick.