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Chart Patterns

Engulfing Pattern

A two-candle reversal pattern where the second candle's body completely engulfs the first candle's body.

What is an Engulfing Pattern?

An engulfing pattern is a two-candle reversal signal where the second candle's real body completely covers (engulfs) the first candle's body.

Types

  • Bullish engulfing: a small red candle followed by a larger green candle that engulfs it. Signals a potential reversal from bearish to bullish, especially at support
  • Bearish engulfing: a small green candle followed by a larger red candle. Signals a potential reversal from bullish to bearish, especially at resistance

Best setups

Engulfing patterns are most reliable at key levels (support/resistance, moving averages, supply/demand zones) and on higher volume than the previous candle.

Related Terms

Candlestick

A chart element showing open, high, low, and close prices for a time period. The body shows open-to-close range.

Doji

A candlestick where open and close are nearly equal, signaling indecision between buyers and sellers.

Hammer / Shooting Star

Single-candle reversal patterns: a hammer signals bullish reversal at lows, a shooting star signals bearish reversal at highs.