Bearish Engulfing
Bearish Engulfing is a technical analysis pattern that occurs when a small white candlestick is followed by a large black candlestick, where the close of the small white candlestick is lower than the open of the large black candlestick. This pattern is considered a bearish reversal pattern, as it indicates that the market sentiment has shifted from bullish to bearish. The pattern is usually seen at the end of an uptrend, and it signals that the trend is likely to reverse and move downwards.
History of Bearish Engulfing
The Bearish Engulfing pattern was first described by Japanese rice trader Homma Munehisa in the 18th century. He was one of the first to recognize the importance of candlestick patterns in predicting market movements. Since then, the Bearish Engulfing pattern has become one of the most widely used technical analysis patterns in the world. It is used by traders to identify potential reversals in the market and to make informed trading decisions.
Comparison Table
| Pattern | Description |
|---|---|
| Bullish Engulfing | A small black candlestick followed by a large white candlestick, where the close of the small black candlestick is higher than the open of the large white candlestick. |
| Bearish Engulfing | A small white candlestick followed by a large black candlestick, where the close of the small white candlestick is lower than the open of the large black candlestick. |
Summary
Bearish Engulfing is a technical analysis pattern that occurs when a small white candlestick is followed by a large black candlestick, where the close of the small white candlestick is lower than the open of the large black candlestick. This pattern is considered a bearish reversal pattern, as it indicates that the market sentiment has shifted from bullish to bearish. For more information about this term, you can visit websites such as Investopedia, TradingView, and StockCharts.
See Also
- Bullish Engulfing
- Doji
- Hammer
- Hanging Man
- Harami
- Inverted Hammer
- Morning Star
- Shooting Star
- Tweezer Tops
- Tweezer Bottoms
