Bullish Engulfing Pattern


DEFINITION of 'Bullish Engulfing Pattern'

A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day.

Bullish Engulfing Pattern

BREAKING DOWN 'Bullish Engulfing Pattern'

As implied in its name, this trend suggests that the bulls have taken control of a security's price movement from the bears. This type of pattern usually accompanies a declining trend in a security, suggesting that a low or end to a security's decline has occurred. However, as usual in candlestick analysis, the trader must take the preceding and following days' prices into account before making any decisions regarding the security.

  1. Bar Chart

    A style of chart used by some technical analysts, on which, as ...
  2. Outside Reversal

    A price chart pattern in which a security's high and low prices ...
  3. Candlestick

    A chart that displays the high, low, opening and closing prices ...
  4. Bearish Harami

    A trend indicated by a large candlestick followed by a much smaller ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Dark Cloud Cover

    In candlestick charting, a pattern where a black candlestick ...
Related Articles
  1. Active Trading

    Tales From The Trenches: Location Is Everything

    When a candle pattern re-occurs near a moving average, it may indicate future support or resistance.
  2. Charts & Patterns

    The Basic Language Of Candlestick Charting

    If you want to use candlestick charting to get a sense of where a stock is headed, you need to learn how to read this unique charting language.
  3. Charts & Patterns

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  4. Forex Education

    Candlestick Charting: Perfecting The Art

    Take a look at continuation patterns and how they can confirm or deny trends.
  5. Charts & Patterns

    Candlesticks Light The Way To Logical Trading

    Crowd psychology is the reason this technique works. Find out how to make it work for you.
  6. Active Trading

    Candlesticks And Oscillators For Successful Swing Trades

    Take advantage of short-term price moves by pinpointing reversals.
  7. Investing

    Asset Manager Ethics: Acting With Competence and Diligence

    Managers must make investment decisions based on their personal investment process, which in turn should be based on solid research and due diligence.
  8. Chart Advisor

    2 Short-Term and 2 Longer-Term Trade Ideas

    Two shorter-term and two longer-term trade ideas to consider, based on trends and the possibility of a breakout.
  9. Chart Advisor

    ChartAdvisor for November 27 2015

    Weekly technical summary of the major U.S. indexes.
  10. Chart Advisor

    Pay Attention To These Stock Patterns Playing Out

    The stocks are all moving different types of patterns. A breakout could signal a major price move in the trending direction, or it could reverse the trend.
  1. How effective is creating trade entries after spotting a Piercing pattern?

    The piercing pattern candlestick formation is considered by traders and analysts to be a very reliable bullish market reversal ... Read Full Answer >>
  2. How are Piercing patterns interpreted by analysts and traders?

    The piercing pattern, also known as the “piercing line” pattern, is a two-candle formation commonly interpreted by traders ... Read Full Answer >>
  3. How are Sushi Roll patterns interpreted by analysts and traders?

    The sushi roll candlestick pattern is commonly interpreted by traders and market analysts as an indication of possible trend ... Read Full Answer >>
  4. What are the most common Bullish patterns used by traders?

    There are several key bullish candlestick patterns that traders commonly use as signals to either enter buy trades or close ... Read Full Answer >>
  5. How are Outside Days interpreted by analysts and traders?

    Outside days are commonly interpreted by traders and market analysts as strong trend signals, especially when they occur ... Read Full Answer >>
  6. What are common strategies traders implement when identifying a Bullish Engulfing ...

    A bullish engulfing pattern is a chart pattern formed when the body of an up candle completely engulfs the body of a down ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center