The Engulfing pattern

The Engulfing is a two-candle pattern in which the second completely engulfs the body of the first. It is one of the clearest and most widely used reversal patterns.

The shape

• The bullish Engulfing — comes at the end of a downtrend: a falling candle first, then a rising candle whose body engulfs the first’s and closes above the open of the falling candle.
• The bearish Engulfing — its opposite at the end of an uptrend: a rising candle first, then a falling candle whose body engulfs the first’s and closes below the open of the rising candle.