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Engulfing Pattern

 

 

 

1. Bullish engulfing pattern:- the first candle is a black body with low volume and the second candle is a white body with high volume totally engulfing the first candle

Bullish Engulfing Pattern

Example: I have identified the formation of bullish engulfing pattern formation in the price time chart of Tatasteel in June 18th, 2007and June 19th, 2007. Explain the breakout, target and the trend.Continue

Day Trade Using Technical

Introduction:Though many different approach is followed by the technical traders. But I found the candlestick approach is the best one to derive the intraday trade decision .Same approach can be used on daily price chart and weekly price chart to derive long term trade decision. The study of candle stick is very wide but not unlimited. I have attended many of these candle patterns on my technical analysis volume 1 and technical analysis volume 2.out of which one most important candle pattern I am going to describe in this section.

Engulfing candle pattern : “Two real candle body having opposed color where in the second candle totally engulfing the first candle”. Engulfing pattern is of two types.

This is a most common candle pattern found in the price time chart. The engulfing pattern is a good trend indicator for swing traders. one most important factor one needs to remember is that the entire candle patterns are short term in nature so the price projection also short term in nature. My point is if the candle pattern fails to give the break out then the better practice is to exit.