Bearish Engulfing
A large bearish candle that completely wraps the prior bullish candle's body — supply takes control — a reversal warning at the top of an uptrend.
The Bearish Engulfing is the mirror of the Bullish Engulfing. The first candle is bullish (continuing the uptrend). The second opens above the first candle's close and closes below its open — the red body swallows the green body.
The gap up opens with bullish momentum; sellers absorb it entirely and drive price below where buyers started. This shift in control is a meaningful warning that the uptrend may be exhausted. Most reliable at resistance, after a sustained rally, with above-average volume on the engulfing candle.
Example
At a major resistance level after a ten-week rally, a large red candle opens above the prior close and closes far below the prior open. Traders reduce longs and look for puts, with stops above the engulfing candle's high.
Related Terms
Bearish Harami
A large bullish candle followed by a small bearish candle inside the first — upside momentum is fading at the top of an uptrend.
BeginnerBullish Engulfing
A large bullish candle that completely wraps the prior bearish candle's body — a strong demand-takes-control reversal signal at the bottom of a downtrend.
BeginnerDark Cloud Cover
Two-candle bearish reversal: a bullish candle followed by a bearish candle that opens above the prior high and closes below the midpoint of the first body.
BeginnerEvening Star
A three-candle bearish reversal: a long bullish candle, a small indecision candle gapping higher, then a large bearish candle reclaiming the midpoint.
BeginnerHanging Man
A Hammer-shaped candle appearing at the top of an uptrend — the long lower wick hints that selling pressure is creeping in — a bearish warning.
BeginnerKicker Pattern
Two candles of opposite colour that open at the same price with a gap — the most powerful two-candle reversal, signalling an abrupt and complete shift in sentiment.
IntermediateOutside Bar
A candle that engulfs the prior candle's entire range — high-to-low — showing a sudden expansion of volatility and a potential directional shift.
BeginnerShooting Star
A small body near the bottom with a long upper wick at the top of an uptrend — buyers were rejected at the high — a bearish reversal warning.
BeginnerThree Black Crows
Three consecutive large bearish candles each closing near their low — sustained selling pressure — a powerful downtrend initiation signal.
BeginnerThree Outside Up / Three Outside Down
A three-candle reversal that adds a confirmation candle to an Engulfing pattern — the engulf flips control, the third candle proves it sticks.
Intermediate