The Bearish Engulfing Candlestick Pattern


The Bearish Engulfing candlestick pattern is one of the most commonly recognized candlestick patterns. It is the opposite of the Bullish Engulfing candlestick pattern. It is a candlestick pattern that is often used by day traders to identify a bearish reversal in a stock.

In this article you will learn:

  • What is a Bearish Engulfing candlestick pattern
  • How to identify and interpret a Bearish Engulfing candlestick pattern
  • Trading techniques after confirming a Bearish Engulfing candlestick pattern

Our Latest Bearish Engulfing Stock Alert

What is a Bearish Engulfing candlestick pattern?

The Bearish Engulfing is a candlestick pattern that occurs in a downtrend and indicates high buying pressure. It is characterized by a large red candle that engulfs the previous day's green candle.

How to Identify a Bearish Engulfing Candlestick Pattern

Because the Bearish Engulfing pattern occurs in a uptrend, our suggestion is to look at the previous 3 trading periods to verify if the uptrend is confirmed. To confirm a Bearish Engulfing, the opening price must be above yesterday's close, and the closing price of the red candle must be lower than yesterday's open. The higher the volume usually indicates a stronger reversal signal.

Trading Techniques for the Bearish Engulfing Candlestick Pattern

It is recommended to wait one trading day to confirm the Bearish Engulfing pattern. If the following day is another red candle, this could mean a bearish reversal in the stock and could indicate a potential short entry point.

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