Engulfing Pattern

The engulfing pattern is a two-candle reversal signal in which the second candle's body fully engulfs the first one's, opening beyond it and closing on the opposite side. A bullish engulfing (a green candle swallowing a red one) hints at a turn upward and a bearish engulfing (red swallowing green) at a turn downward; the signal carries more weight at the end of a clear trend.