In this pattern, the real body of a bearish candle (the range from open to close) is encompassed by the body of a consequent bullish candle. This indicates an increase in activity from both bears and bulls, and a shift of overall market sentiment towards bullishness. Like with all the patterns we’ve discussed thus far, this pattern should be viewed in consideration of the trend at the time: if a bullish engulfing pattern appears in a downtrend, it can suggest a shift price trend and the onset of buying demand becoming the prevailing force that will ultimately push price higher in the context of the timeframe being viewed.
The Bullish Engulfing pattern represents a complete change in investor sentiment.
The Engulfing pattern is a major reversal pattern comprised oftwo opposite colored bodies. The Bullish Engulfing Pattern formed after a downtrend.It opens lowerthatthe previous day’s close and closes higherthan the previous day’s open.Thus,the white candle completely engulfs the previous day’s black candle.