The Bearish Engulfing Line is a strongly bearish if it occurs after a significant up-trend (i.e., it acts as a reversal pattern). It occurs when a small bullish (empty) line is engulfed by a large bearish (filled-in) line.
Engulfing Lines are one of the most important and powerful candle patterns. To form the pattern, today's range encloses or "engulfs" the prior day's range, thereby indicating great market strength in the direction of today's close.
From a psychological perspective, Engulfing Lines indicate that the market opened in the same direction as the prior day, but then reversed sentiment to close strongly in the opposite direction, overcoming and reversing yesterday's assumption regarding value.
If yesterday closed lower, a Bullish Engulfing Line will form when today's open is below yesterday's close abd today's close is above yesterday's open. The Bearish Line is just the opposite, where a black body enckises a previous white body.
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Bearish Engulfing Line