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Candlestick Basics Bearish Candlestick One Day Candlestick
Bullish Candlestick Chart Patterns
| Bullish Engulfing | Three White Soldiers | Bullish Piercing | Three Outside Up |
| Three Inside Up | Morning Star | Morning Doji Star | Abandoned Baby Bullish |
| Bullish Harami |
Tutorial on Bullish Engulfing Candlestick Pattern
Bullish Engulfing Candlestick Pattern generally forms at the bottom of a downtrend, or near a potential support. Basically this pattern is made up of two candlestick or can say it takes 2 day for the pattern to be formed.
1. Smaller Bearish Candlestick (Day 1)2. Larger Bullish Candlestick (Day 2)
On Day 1, a bearish candlestick (Open price is higher than the close price) is formed shown as red candlestick in the Fig. Below. On Day 2, a bullish candlestick(open price lower than the close price) is formed which completely overshadows or engulfs the body of bearish candlestick formed on Day 1, shown as green candlestick in the below Fig.
2.The close price of the Day 2 candlestick is higher than the open price of Day 1 candlestick .
Bullish Engulfing Candlestick Pattern is a very common trend reversal pattern. Though it is not easy to pick this pattern but if done correctly one one can easily catch the trend reversal/buying Signal, and its highly rewarding.
The strength of this pattern is increased by the size of the engulfing candlestick. The bigger the engulfing candlestick the more significant is the pattern. The first day the small bearish candle may looks like a continuation of downtrend but its small size irrespective of wicks may show that the bearish signal is weakening. This is confirmed by the Long Bullish candlestick formed the next day.The larger candlestick tell a lot more about the market sentiments that the bull is taking over the bear.
On combining this pattern with any other technical indicators like Volume, Stochastic, RSI, MACD etc, further confirms this pattern and one can quickly pick up the trend change or the buy signal. For example evidence of higher volume on the third day further strengthen this pattern reliability. Similarly a price gap up the next day (Day 3) support further, this pattern of trend reversal.
| Stock Screener of Indian Stock with Bullish Engulfing formation |
Corresponding Pattern Bearish Engulfing Pattern |
An Example of Bullish Engulfing Pattern
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