Bullish 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.
The Bullish Engulfing is a two-candle pattern. The first candle is bearish (continuing the downtrend). The second candle opens below the first candle's close and closes above its open — the green body fully engulfs the red body.
The gap down on open shows initial bearish follow-through; the strong recovery and close above the prior open shows buyers overwhelmed that selling completely. The bigger the engulfing body relative to the first candle, the more conviction behind the reversal.
Most reliable at a support level, after a prolonged downtrend, and with elevated volume on the engulfing candle.
On the desk
After a three-week slide into a demand zone, a large green candle opens below the prior close and closes decisively above the prior open, swallowing it whole. Volume spikes. Swing traders buy the close with a stop below the low of the pattern.