Bearish engulfing

A down candle that swallows the previous up candle

What it is

The mirror image: an up candle followed by a down candle whose body fully covers it, closing below the prior open.

What it may suggest

Sellers overwhelmed the prior period. Into resistance it may suggest distribution.

Where it fails

Prone to false signals in choppy conditions, and often just the first leg of a range rather than a reversal.

More candlesticks

MarubozuFull body, almost no wicks: one-sided period
Spinning topSmall body, wicks both sides
Morning starDown candle, small pause, up candle
Evening starUp candle, small pause, down candle
Inside barA candle contained entirely by the one before it
DojiOpen and close nearly equal: indecision

ChartPeak is an educational tool. It is not financial advice and does not make investment recommendations. Trading carries a risk of loss, and past performance does not indicate future results. Do your own research.

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