Bearish Engulfing
A strong bearish reversal pattern where a large red body fully engulfs the prior green body, ideally after an uptrend.
BearishReversalHigh reliability
engulfingreversalresistancebody
Definition
- Two-candle pattern.
- Candle 1 is bullish (green). Candle 2 is bearish (red).
- The real body of Candle 2 fully engulfs the real body of Candle 1.
Market Psychology
- Buyers push price up first.
- Sellers then overwhelm and close strongly below the prior candle’s body.
- Often signals distribution or profit-taking at resistance.
Rules
- Prefer a prior uptrend or rally into resistance.
- The second candle body should be meaningfully larger.
- Stronger if the second candle closes near its low.
Best Context
- At resistance after an uptrend.
- After a liquidity sweep above highs then rejection.
- At the top of a range (range high).
Confirmation Ideas
- Next candle makes a lower low / closes lower.
- Pattern forms at resistance (prior highs, supply zone, trendline).
- Momentum/RSI divergence can add confluence.
Invalidations
- Price immediately reclaims the engulfing candle midpoint.
- Breaks above the engulfing candle high.
Common Mistakes
- Shorting directly into support.
- Ignoring higher timeframe trend and levels.
- Treating a tiny engulf as “strong” without range/size.