Engulfing Bearish

 

Pattern: Reversal Trend: Bearish Reliability: Moderate

 

How to Identify it

• A long white day occurs
• The second day is a black day that completely engulfs the real body of the first day

What it Means

Occurring in an uptrend, the Engulfing depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day’s open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.