Bullish Engulfing Pattern

A reversal pattern of two candle sticks that forms when a small black candlestick is followed the next day by a large white candlestick, the body of which completely overlaps or engulfs the body of the previous day’s candlestick is known as Bullish Engulfing Pattern.
The meaning of engulf to surround or cover something completely.
In the Bullish Engulfing pattern one candlestick covers (or engulf) another.
When a downtrend and occurs by one bearish candlestick (which is covered) and one bullish candlestick (which does the covering), then this two candlestick pattern occurs after.


Bullish Engulfing Pattern



The Bullish Engulfing Pattern can be identified by the following crucial criteria:


  • An obvious downtrend must be in progress.

  • There should be a small black candle at the bottom of the downtrend.

  • A white candle must follow the black candle and its body must completely cover the black candle (engulf it).

  • The white candle’s top must be above the black candle’s top, and its bottom must be below the black candle’s bottom.


Meaning


The bears were controlled as a Bullish Engulfing pattern appears in a downtrend
The bears cannot increase the price fast before the bulls take control because there is a gap down.
The candle comes to close and cause a price hike as compared to open price of the previous candle.
When a gap downs in the morning to a strong upward hike which causes a large bullish candle and shift in sentiment occurs.
There is a possibility of reversal as bulls are in control but the confirmation is required yet.
A better specific Bullish Engulfing pattern can be analyzed by observing these two points:


  • The reversal pattern is expected to be effective if the preceding downtrend is long and significant.

  • The candlestick pattern will be stronger when the body of white candle will be taller.

 

A

Abandoned Baby | Account Statement Report | Account Value | Accumulation Area | Accumulative Swing Index ASI | Address | ADDY | ADP National Employment Report | Advance Or Decline Index | Afghanistan Afghanis | Agency Model | Aggressor | Alan Bollard | Alan Greenspan | Albania Leke | Algerian Algeria Dinars | Alligator | Altcoin | Analysts | Andrews Pitchfork | Angela Merkel | Angola Kwanza | Anti Money Laundering AML | ANZ Commodity Price Index | Application Programming Interface API | Appreciation | Arbitrage | Argentina Pesos | Armenian Drams | Aroon Oscillator | Aroon Up And Down | Aruban Guilder | Ascending Channel | Ascending Trend Line | Ascending Triangle | ASIC Mining | Asset | Asset Purchase Programme APP | Asset Purchases | Asymmetric Encryption | Asymmetric Slippage


B

Bag | Bag Holder | Bahmas Dollars | Bahrain Dinars | Bail In | Bail Out | Balance Of Trade | Baltic Dry Index | Bangladesh Taka | Bank Levy | Bank Of Canada BOC | Bank Of England BOE | Bank Of International Settlement BIS | Bank Of Japan BoJ | Bank Run | Bank Run | Banking Institutions | Bar Chart | Barbados Dollars | Base Currency | Base Rate | Basing | Basing Point | Bear | Bear Flag | Bear Market | Bear Trap | Bearish | Binary Options | Bitcoin Cash | Bitcoin Maximalist | Bitcoin Or BTC | Block | Block Explorer | Block Header | Block Height | Block Reward | Blockchain | Blue Chip | Bolivia Bolivianos | Bollinger Bands | Bond | Bond Auction | Bond Yeild | Book | Boris Schlossberg | Botswana Pulas | Brazilian Brazil Real | Breakdown | Breakeven | Breakout | Brent Crude | Bretton Woods Agreement Of 1944 | BRIC | Broadening Formation | Broker | BTD | BTFD | Bucket Shop | Bulgarian Leva | Bull | Bull Flag | Bull Market | Bull Trap | Bullish | Bullish Engulfing Pattern | Bundesbank | Burundi Francs | Business Inventories | Buy Side | Buying Pressure


C

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E

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