Engulfing ReversalTechnical Analysis
The engulfing candlestick pattern is a common reversal. They come in bearish and bullish varieties, but they both have one similar feature: the second bar in the pattern is larger than the first, and the opposite color.
A bullish engulfing candle’s first bar will be a black or red bar, usually with a smaller height. It indicates the sellers barely had control over the day. The second bar will be green or hollow, and substantially longer, indicating the buyers firmly overcame selling pressure on the second day. This pattern normally occurs near the low of a trend, but you should look for all the normal technical analysis signs, like support and resistance.
A bearish engulfing candlestick is the reversal of the bullish. The first day is a small bar that is green or hollow, which shows the buyers barely held control of the day. The second day is red or black, displaying solid bearish control over the day. This pattern normally happens at the top of a trend.
We would be remiss if we didn’t say that engulfing patterns can also be continuation patterns. Engulfing candles can indicate a trend is likely to continue. If candles consistently engulf prior candles in the trend direction, the trend is likely still strong. Trading pressure is joining in the trend direction, and other traders are confident it will continue.
Did we help you? Vote with a Crypto-Donation!
Donate Bitcoin Cash
International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
Investment and Finance, Serviced by Amazon
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.