ENGULFING CANDLESTICK PATTERN: Among the most important of candlestick reversal patterns for stock traders are the engulfing positions, which can be seen as the opposite of the harami positions. There are two types, bullish and bearish engulfing pattern. BULLISH ENGULFING PATTERN: The bullish engulfing pattern occurs over two candles during a downtrend. The first is a fair-sized descending (red or black) candle, and the second is a larger ascending (white) candle that completely engulfs the previous time period’s trading range(refer chart – I): - the open of the second candle is higher than the previous day’s close; and The close of the second candle is lower than the previous day’s open. Chart - I BEARISH ENGULFING PATTERN: The opposite of this is the bearish engulfing pattern, which occurs over two candles during an uptrend. First comes a fair-sized ascending candle, which is followed by a longer descending candle which completely engulfs the previous time period’s trading range (refer chart – II): - the open of the second candle is higher than the previous day’s close; and The close of the second candle is lower than the previous day’s open. Chart - II Author Bio: I am working as a technical analyst in one of the share market company which provide intraday tips, Mumbai share market tips, stock tips, intraday nifty tips etc. Writing articles about the basic information about share market is one of my interests.
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