Engulfing pattern

An Engulfing pattern is a two-candlestick chart signal used in technical analysis to indicate a potential change in market direction. The first candle shows the current trend, either bullish (rising) or bearish (falling). The second candle completely "engulfs" the first, meaning its real body is larger and fully covers the previous candle's body in the opposite direction. A bullish engulfing suggests a shift from selling to buying pressure, indicating a potential upward move. Conversely, a bearish engulfing indicates selling dominance and a possible downward trend. This pattern helps traders identify potential reversals in the market.