Engulfing Patterns

Bullish Engulfing Candlestick Pattern

The bullish engulfing pattern is another multiple candlestick pattern. If this pattern occurs after a meaningful price decline, it indicates a potential bullish reversal.

For additional confirmation, wait for the price to close above the high of the bullish engulfing pattern.

This pattern is formed by two candles where the second candle engulfs the first candle, the first being the bearish candle, indicating the continuation of the downtrend. The bullish candle's second candle engulfs the first candle and indicates that the bulls are taking over the market.

Bearish Engulfing Candlestick Pattern

Bearish engulfing candlestick pattern is another multi-stick pattern. If formed after a significant uptrend, it indicates a potential bearish reversal.

The first is a bullish candle, and the second is a bearish candle. The second one engulfs the first candle signifying the rise of bears in the market.

A bearish engulfing pattern hints that a market may have formed a top. These patterns should only be traded at swing highs, and also wait for the prices to close below this pattern as an additional confirmation.,

Both of these are candlestick patterns. But they have different meanings. In the coming section, we will discuss the significance of these two types and where and when they can be used.

The engulfing patterns that we saw just now are of two different types. One is known as the Bullish engulfing pattern and the other is the Bearish engulfing pattern.