What is Bearish Engulfing Pattern?
It is one of the most widely followed reversal pattern. The pattern usually gets formed at the end of uptrend when the selling pressure overwhelms buying pressure for one or more days. The pattern consists of two Candlesticks:
1. Smaller Bullish Candle
2. Larger Bearish Candle
Generally, the bullish candle real body of Day/week 1 is contained within the real body of the bearish candle of Day 2/week 2.
This is how investopedia describes - Bearish Engulfing pattern
A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one ~ Read more at Investopedia.com
Let us look at Aarti Ind stock weekly chart
There is formation of Bearish engulfing pattern on the chart after a good uptrend. Now remember we are just two days in the week and hence the candle we see on the chart is tentative and confirmation will come only by Friday. Such Bearish patterns result in dramatic change in investor sentiment on the stock. Will that happen - we will see. Should one be worried - yes. Technically, the selling does not look good. I have shared this post to watch a technial pattern in action. I will review the chart again in few weeks to see what happened.
1. ICICI Bank stock illustrates what Text Book support means
2. How Long asset can be in downtrend and How Low it can go?
3. Why you should respect Trend – Let’s Discuss Crude Oil
4. Just Dial: Building a Base and doing all the right things
5. S&P500 - Too much of analysis leads to Nothing
6. ACC stock: Road to Nowhere
7. Allcargo Logistics doing nothing for Now but WHY?
8. The Technical Problem with Century Enka
9. How Himatsingka Seide stock achieved 100% returns in just 6 weeks?
10. What should one do with Exide Ind stock?
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers