Bearish Engulfing Pattern

DEFINITION of 'Bearish Engulfing Pattern'

A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one.

Bearish Engulfing Pattern

BREAKING DOWN 'Bearish Engulfing Pattern'

As implied by its name, a bearish engulfing pattern may provide an indication of a future bearish trend. This type of pattern usually accompanies an uptrend in a security, possibly signaling a peak or slowdown in its advancement. However, whenever a trader analyzes any candlestick pattern, it's important for him or her, before making any decisions, to consider the prices of the days that precede and follow the formation of the pattern.

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