Engulfing patterns: One day swallows the last
How an engulfing pattern shows the balance of power flipping in a single day, what makes one stronger, and how to spot it on a stock chart.
When one day swallows the day before
An engulfing pattern takes two candles. The second one’s body completely covers the first one’s body, and it is the opposite colour. It shows the balance of power flipping in a single day.
What to look for
- Bullish engulfing: after a fall, a small red day is followed by a bigger green day that opens at or below its close and closes above its open.
- Bearish engulfing: after a rise, a green day is swallowed by a bigger red day.
- The bigger the second body compared with the first, the stronger the message.
Only the bodies count. The second candle doesn’t need to cover the first one’s wicks.
The stock had been rising. Yesterday was a small green day. Today opened above yesterday’s close and closed below yesterday’s open. What pattern is this?
- A bullish engulfing
- A bearish engulfing
- A doji
Show the answer
A bearish engulfing. Today’s red body covers all of yesterday’s green body. Buyers started the day ahead, then sellers took over and wiped out everything yesterday’s buyers had gained. After a rise, that is a bearish engulfing.
Buyers wiped out
The stock had climbed to about ₹1,003. On the last day it opened higher, at ₹1,006, then sellers took over and closed it at ₹978, below the whole of the previous day’s body. Everyone who had bought over the last two days was now losing money. Price kept falling over the next two weeks.
An engulfing candle on heavy volume is more convincing. Check the volume bar under it: here it was about twice the usual.
Practise Engulfing patterns, free
Reading about it is step one. In MarketSeekho you see a real NSE chart with the future hidden, call Bull or Bhalu, say why, and get graded on your reasoning, not luck.
Common questions
What is Engulfing patterns?
An engulfing pattern takes two candles. The second one’s body completely covers the first one’s body, and it is the opposite colour. It shows the balance of power flipping in a single day.Bullish engulfingBearish engulfing
What should I look for with Engulfing patterns?
Bullish engulfing: after a fall, a small red day is followed by a bigger green day that opens at or below its close and closes above its open. Bearish engulfing: after a rise, a green day is swallowed by a bigger red day. The bigger the second body compared with the first, the stronger the message.
How can I practise reading Engulfing patterns for free?
MarketSeekho has a free four-page chapter on Engulfing patterns (learn, answer a question, spot it on a chart, then make a call) and daily real-chart practice graded on your reasoning. No sign-up or money needed.