Technical Analysis · Bearish Reversal
Bearish Engulfing
A Bearish Engulfing pattern is a two-candle bearish reversal where a large bearish candle's body completely engulfs the smaller bullish candle before it.
Bullish candle
Bearish candle
Highlighted = the pattern itself
Category
Bearish Reversal
Signal
Sell
Reliability
★★★★★
Candles Involved
2
What does it signal?
Sellers decisively overwhelmed buyers within a single session — one of the most widely recognized top-reversal signals in technical analysis.
How to identify a Bearish Engulfing
- Forms after an uptrend.
- First candle is a small-bodied bullish candle.
- Second candle is bearish and its body opens above (or at) and closes below the first candle's entire body.
How to trade a Bearish Engulfing
- Many traders enter short on the close of the engulfing candle or on a retest of its body.
- Stop-loss is commonly placed above the high of the engulfing candle.
Educational only — not financial advice. Combine any candlestick pattern with broader market context, risk management, and your own trading plan.
FAQ
Common questions
It's one of the more dependable single-setup reversal patterns, especially after an extended uptrend and on elevated volume.
Related