Bullish Engulfing
Bullish Engulfing is a technical analysis pattern that occurs when a small black candlestick is followed by a large white candlestick, with the close of the white candlestick being higher than the open of the black candlestick. This pattern is considered to be a strong bullish signal, indicating that the price of the security is likely to increase in the near future. The pattern is often seen as a sign of a reversal in the current trend, as the large white candlestick “engulfs” the small black candlestick.
History of Bullish Engulfing
The Bullish Engulfing pattern was first described by Japanese rice trader Homma Munehisa in the 18th century. He observed that the price of rice often moved in the same direction for several days in a row, and that the direction of the price movement was often determined by the opening and closing prices of the day. He also noticed that when the closing price of the day was higher than the opening price, the price of rice was likely to continue to increase in the following days. This observation eventually led to the development of the Bullish Engulfing pattern.
Comparison Table
| Pattern | Description | Signal |
|---|---|---|
| Bullish Engulfing | Small black candlestick followed by a large white candlestick | Strong bullish signal |
| Bearish Engulfing | Small white candlestick followed by a large black candlestick | Strong bearish signal |
Summary
Bullish Engulfing is a technical analysis pattern that occurs when a small black candlestick is followed by a large white candlestick, with the close of the white candlestick being higher than the open of the black candlestick. This pattern is considered to be a strong bullish signal, indicating that the price of the security is likely to increase in the near future. The pattern was first described by Japanese rice trader Homma Munehisa in the 18th century, and is often seen as a sign of a reversal in the current trend. For more information about Bullish Engulfing, you can visit websites such as Investopedia, TradingView, and StockCharts.
See Also
- Bearish Engulfing
- Bullish Harami
- Bearish Harami
- Bullish Three Inside Up
- Bearish Three Inside Down
- Bullish Abandoned Baby
- Bearish Abandoned Baby
- Bullish Piercing Line
- Bearish Dark Cloud Cover
- Bullish Morning Star
