The new candle completely engulf the previous candle’s body
- Strong reversal pattern
- Use only at the end of a trend (not sideways)
- Even stronger when it occurs on support or resistance
First, a Doji, then the Bearish Engulfing candle completely encloses the previous candle (and even the previous large, upward candle).
In this example, the engulfing candle also coincides with a crossover to the downside on the MACD.
