Bearish Engulfing Pattern
What it is:
How it works (Example):
The bearish engulfing pattern can be illustrated in the following manner using candlestick charting:
In this example, the smaller white candlestick is overshadowed (or engulfed) by the larger black candlestick. This indicates the stock opened the second period higher than the previous close and tried to push higher during the trading period. However, investors began to sell the stock, pushing the price sharply lower at the close and indicating bearish sentiment has taken over.