Engulfing Pattern
A two-candle reversal pattern where the second candle's body completely covers the first one's body, in…
In plain English
A two-candle reversal pattern where the second candle's body completely covers the first one's body, in the opposite colour.
An engulfing pattern is a takeover. A small candle is followed by a bigger candle of the opposite colour whose body swallows it whole.
After a decline, a big up candle engulfing a down candle is a bullish engulfing. After a rise, the reverse is a bearish engulfing. Location matters: at a key level it means more.
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