The Engulfing Pattern
Also, a prime use of the engulfing-patterns is utilizing them as support and resistance.
Bullish Engulfing-Pattern
Identification:
Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day’s open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside Up pattern.
This pattern is a more reliable addition to the standard engulfing-pattern. The third day is confirmation of the bullish trend reversal.
Bearish Engulfing Pattern
Identification:
Occurring in an uptrend, the Engulfing pattern depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day’s open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside Down pattern.
This pattern is a more reliable addition to the standard engulfing-pattern. The third day is confirmation of the bearish trend reversal. The "Candlestick Trading for Maximum Profits" course will teach you how to distinguish between true reversal signals and the more common false signals. This stock trading course is not only an in-depth study of candlestick charting but also a study of a candlestick system of trading. It will teach you everything to do and use to make money in the stock market using a candlestick system like you have never seen before.
Conclusion _________________________________________________________________
As with all candlestick charts and patterns, this should be used with other technical analysis tools to further confirm its effectiveness. Recommended Candlestick Charting Tools and Resources
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