Page 10 of the handbook, two candles
Bearish Engulfing
- Signal
- Bearish reversal
- Candles
- 2
- Best found
- At resistance after an uptrend
What has to be true
- Candle 1 closes green
- Candle 2 gaps up, opening above candle 1's close
- Candle 2 closes below candle 1's open, engulfing its body
The bearish engulfing is a very powerful 2-candle reversal pattern. It is most powerful when found at a resistance after an uptrend.
It begins with candle 1 closing green, followed with candle 2 gapping up and opening above the previous candle's close, showing potential buyer control at open.
The gap up is met with extreme seller presence, with sellers taking price down and closing below the previous day's open, completely engulfing the previous candle's body.
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ReadyBuilding the chart
The pattern forms
Checking the setup
What happened next