Target: Engulfing pattern target is unlimited until and unless the price does not form any bearish reversal candle pattern in the chart. In more than 50% cases the throw away happens before giving a break out in this pattern.
Volume: Volume used to be moderate in the engulfing day. Sudden rise in volume you can observe in the pattern break out day.
Pattern failure: If the price moves below 585-25 = 560 then we say that the bullish engulfing pattern is a failure.
What will be entry and exit point? The entry is suggested at a price above the engulfing days high having stop loss below the pattern failure price point. The target is unlimited until and unless any bearish formation does not takes place. It is also advisable to make an entry in the counter after the pattern break out happens.
In the above example the pattern failure does not happen but throwaway happens multiple times before giving a breakout on 14th July 2007.In this context the bullish trend reversal pattern means the trend is going to change from bearish to bullish. Bearish trend reversal pattern means the trend is going to change from bullish to bearish.
2. Bearish engulfing pattern:- “the first candle is a white body with low volume and the second candle is a black body with high volume totally engulf the first body”
