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- Engulfing Patterns
Engulfing Patterns
Bullish Engulfing Pattern
It contains 2 candles.
First day:
- small black candle that closes lower than the previous larger black candle.
- sellers are not very aggressive.
Second day:
- large white candle that engulfs body of first candle and close near top of range --> small upper wick.
- wick first candle usually longer than wick second candle.
- buyers have overwhelmed the sellers --> they are going to take control --> bullish signal.
Bearish Engulfing Pattern
It contains 2 candles.
First day:
- small white candle that closes higher than previous larger white candle.
- buyers are not very aggressive.
Second day:
- large black candle that engulfs body of first candle and close near bottom of range --> small lower wick.
- wick first candle usually longer than wick second candle.
- sellers have overwhelmed the buyers --> they are going to take control --> bearish signal.
