Bearish engulfing pattern: does price fall?
A bearish engulfing pattern is a red candle whose body completely covers the previous green candle’s body, after a rise. Sellers wiped out the previous day’s buying in one session.
When “Bearish engulfing” appeared, NIFTY 200 stocks were lower 12 trading days later 45.2% of the time, against 44.7% after any day: about the same as picking a random day.
| After | Higher | Average move | Median move | Higher after any day |
|---|---|---|---|---|
| 5 trading days | 53.1% | +0.3% | +0.3% | 53.9% |
| 12 trading days | 54.8% | +1.2% | +0.8% | 55.3% |
| 20 trading days | 58.6% | +2.4% | +1.8% | 56.8% |
Year by year
| Year | Signals | Higher after 12 days | Any day |
|---|---|---|---|
| 2021 | 335 | 47.8% | 54.4% |
| 2022 | 720 | 49.2% | 52.1% |
| 2023 | 758 | 63.9% | 61.3% |
| 2024 | 660 | 55.0% | 53.7% |
| 2025 | 386 | 53.1% | 53.1% |
| Large cap only | 1408 | 55.7% | |
| Mid cap only | 1451 | 53.9% |
What it is
A bearish engulfing pattern is a red candle whose body completely covers the previous green candle’s body, after a rise. Sellers wiped out the previous day’s buying in one session.
How we detected it
A green candle is followed by a red one that opens at or above the green close and closes at or below the green open, with a body more than 1.05 times the green body. Only bodies are compared, not wicks. Before the green candle, the close rose more than 2.5% over the 8 days before it. We count the red day.
How traders read it
In a strong uptrend many of these mark a pause rather than a top. Traders take it more seriously near resistance, and wait for a close below the pattern’s low.
A signal is a probability, not a promise
Even the most reliable signal in this study was followed by the opposite move 37% of the time. A signal tilts the odds; it doesn’t decide the outcome.
Signals work better when they agree with the trend and with each other. Whatever the signal, decide your stop-loss before you act.
Practise spotting it, free
The Engulfing patterns chapter teaches this signal in five minutes, then you call real NSE charts and get graded on your reasoning.
Common questions
Does the bearish engulfing signal work on Indian stocks?
When “Bearish engulfing” appeared, NIFTY 200 stocks were lower 12 trading days later 45.2% of the time, against 44.7% after any day: about the same as picking a random day. No single signal is reliable on its own; traders combine it with the trend and manage risk with a stop-loss.
How often did stocks rise after this signal?
Across 2,859 signals on 186 NIFTY 200 stocks (2021–2025), the price was higher after 5, 12 and 20 trading days 53.1%, 54.8%, 58.6% of the time. After any day it was 53.9%, 55.3%, 56.8%.
How is “Bearish engulfing” defined here?
A green candle is followed by a red one that opens at or above the green close and closes at or below the green open, with a body more than 1.05 times the green body. Only bodies are compared, not wicks. Before the green candle, the close rose more than 2.5% over the 8 days before it. We count the red day.
How these numbers were made
We ran the same signal detector MarketSeekho uses to grade players over every trading day of 187 NIFTY 200 stocks, Jan 2021 to Oct 2025, using NSE end-of-day prices (1,54,833 stock-days). We counted the first day a signal appeared, then ignored the same signal on the same stock for 12 trading days so results don’t overlap. Windows with splits, bonuses or trading halts were left out.
“Any day” is the baseline: the same measure after every day in the data, signal or not. It matters because 2021–2025 was mostly a rising market, so stocks were higher after 12 days more often than not anyway. Past results don’t predict future ones, and this is not investment advice.