Lesson 6.5

Bullish and Bearish Engulfing

⏱ ± 1 min read · 👁 84 readers

A two-bar pattern that marks a shift in momentum.

Two-candle engulfing bodies. The second body covers the first body; the wick ranges can differ.
BelajarGold diagram. Click the image to enlarge.

Bullish engulfing

  • Candle 1 is a small bearish candle; Candle 2 is a bullish candle whose body "swallows" the body of candle 1.
  • Appears after a decline → buyers take over.

Bearish engulfing

  • Candle 1 is a small bullish candle; Candle 2 is a bearish candle that swallows the body of candle 1.
  • Appears after a rise → sellers take over.

Pattern quality

Stronger when: the engulfing candle has a large body with short wicks, volume/momentum increases, and it is located at an important level in the direction of the bigger trend.

Key points

  • Engulfing = a transfer of control within two periods.
  • Size and location determine its weight.
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