Charts & technicals
What is Engulfing pattern?
Also called: Bullish engulfing, Bearish engulfing
Hinglish mein padhein: Engulfing pattern kya hota hai?
An engulfing pattern is two candles where the second body completely covers the first, in the opposite colour — a common reversal signal.
A bullish engulfing appears after a fall: a small red candle followed by a larger green one. A bearish engulfing is the reverse after a rise.
It carries more weight on higher volume and near support or resistance.
Related terms
- Candlestick chartA candlestick shows a period's open, high, low and close. The body spans open to close; the wicks show the high and low.
- HammerA hammer is a candle with a small body near the top and a long lower wick, appearing after a decline — a possible bullish reversal.
- Support and resistanceSupport is a price level where buying has repeatedly stopped a fall; resistance is where selling has repeatedly capped a rise.