Bullish Engulfing Pattern

BULLISH ENGULFING PATTERN (BEP)
the bears losing their momentum and the bulls gaining control

Characteristics:
1. Market is on a downtrend;
2. Then there is small black body; and
3. The following day, we see a white body that completely engulfs the black body of the previous day.

Brief Explanation:
The market is bearish, but there is subsided selling as seen in the short black stick on Day 1. The next day shows the bull’s strength with a closing price at (or above) the prior day’s open. The downtrend is now losing its momentum and the bulls are gaining control.

Notes:
1. The BEP is an important bottom reversal signal
2. Day 1 and Day 2’s body sizes are important
3. A confirmation of the third day downtrend reversal is necessary (through a white stick, a large gap up or a higher close).