The engulfing candle is a candle type that engulfs the previous candle
with its body.
Two main types of Engulfing Candles, first type of Engulfing Candle engulfs previous candles body with its body completely ( top left and bottom right below ), this is the most common type of engulfing candle.
The second type of Engulfing Candle engulfs most of previous candle body with its body and also previous candles body high ( bottom left below ) for bullish or most of previous candles body with its body and previous candle body low ( top right below) for bearish.
Examples of Engulfing Candle Patterns below:
A bullish engulfing candlestick setup is best observed in a support zone. This type of pattern would suggest a possible potential and probably movement higher in price.
A bearish engulfing candlestick setup is best observed in a resistance zone. This type of pattern would suggest a possible potential and probable movement lower in price.
Above – Some examples above of bullish engulfing candles.
Above – And some more examples.
