Bullish and Bearish Engulfing Lines – Candlestick

An engulfing pattern occurs when the daily trading range is larger than the previous day’s range and has a counter-trend close. This pattern can indicate that the market has lost strength to continue in the direction in which it was previously headed.

 

Bullish Engulfing Line: This pattern is very bullish if it occurs after a fairly large downtrend, acting as a reversal pattern.

Bearish Engulfing Line: This pattern is very bearish if it occurs after a fairly large uptrend, acting as a reversal pattern.

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