What is a Bearish Engulfing Pattern?
The bearish engulfing pattern is a candlestick chart pattern that often signals a reversal of an uptrend. It is formed when a small bullish candle is followed by a larger bearish candle that completely engulfs the previous candle, including its wick.
The bearish engulfing pattern suggests that the bears have taken control of the market and are overpowering the bulls. It can be a strong signal that the price may continue to move lower in the near future. Traders often use this pattern as an entry point for shorting a stock or other financial instrument.
As a trader, it is important to note that the bearish engulfing pattern is not a guarantee of a price reversal, and it is always important to use other indicators and analysis to confirm the pattern before making a trading decision. Also, this pattern is best used in combination with other technical analysis tools to confirm its validity and improve the accuracy of its predictions.
Analytic Dave
AnalyticalDave is a personal financial analysis portfolio that captures my Derivatives trading, stock, and investing journey. My portfolio does NOT act as a financial advisor to any community. It is only purposed for journaling my story as a self-taught trader and investor.
