Bullish Engulfing Pattern
BULLISH ENGULFING PATTERN (BEP)
the bears losing their momentum and the bulls gaining control
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.
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.
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).