Bullish & Bearish Engulfing
One candle swallows the last — a vivid sign that control just changed hands.
An engulfing patternA reversal where one candle swallows the prior one. is a two-candleA chart bar showing a period’s open, high, low and close. reversal where the second candleA chart bar showing a period’s open, high, low and close.’s body completely engulfs the first’s — it opens beyond one end and closes beyond the other, swallowing the previous body whole.
- Bullish engulfingA reversal where one candle swallows the prior one. — after a downtrendThe prevailing direction of price: up, down or sideways., a big green candleA chart bar showing a period’s open, high, low and close. engulfs the prior small red one. Buyers didn’t just win the period; they erased the previous period’s selling entirely.
- Bearish engulfingA reversal where one candle swallows the prior one. — after an uptrendThe prevailing direction of price: up, down or sideways., a big red candleA chart bar showing a period’s open, high, low and close. engulfs the prior small green one. Sellers overwhelmed and reversed the previous period’s gains.
The engulfing candleA reversal where one candle swallows the prior one. is so trusted because it shows a decisive, visible transfer of control — not a subtle hint like a dojiA candle with almost no body — indecision., but one side completely overpowering the other in a single period. The bigger the engulfing candleA reversal where one candle swallows the prior one. relative to what it swallows (especially on rising volumeThe number of shares or contracts traded in a period.), the more emphatic the message: the crowd just changed its mind, hard.
ExampleA stock drifts down on small red candles, then one day a large green candleA chart bar showing a period’s open, high, low and close. opens below the prior close and closes above the prior open — engulfing it. Buyers have seized control in a single, forceful session; a bullish reversal is signalled.
Common mistakeCounting a candleA chart bar showing a period’s open, high, low and close. as “engulfing” when only the wicks overlap. It’s the bodies (open-to-close) that must be engulfed — the real measure of who controlled the period. Wick overlaps don’t count.
Key takeawayAn engulfing patternA reversal where one candle swallows the prior one. is a two-candleA chart bar showing a period’s open, high, low and close. reversal where the second body fully swallows the first — a decisive handover of control. Bullish after a downtrendThe prevailing direction of price: up, down or sideways., bearish after an uptrendThe prevailing direction of price: up, down or sideways.; bigger candleA chart bar showing a period’s open, high, low and close. + higher volumeThe number of shares or contracts traded in a period. = stronger signal.
FAQs
Is an engulfing pattern more reliable than a single-candle signal?
Often, yes — it shows a clear, forceful shift over two periods rather than a one-candle hint, so traders tend to weight it more. But like all patterns it still needs context (trend, location, volume) and ideally confirmation before you act.