The Engulfing bar as it states in its title is formed when it fully engulfs
the previous candle. The engulfing bar can engulf more than one
previous candle, but to be considered an engulfing bar, at least one
candle must be fully consumed.
The bearish engulfing is one of the most important candlestick
patterns.
This candlestick pattern consists of two bodies:
The first body is smaller than the second one, in other words, the
second body engulfs the previous one.
In case of a bearish engulfing bar, this pattern tells us that sellers are
in control of the market.
When this pattern occurs at the end of an uptrend, this indicates that
buyers are engulfed by sellers which signals a trend reversal.
The bullish engulfing bar consists of two candlesticks, the first one is
the small body, and the second is the engulfing candle.
The bullish engulfing bar pattern tells us that the market is no longer
under control of sellers, and buyers will take control of the market.
When a bullish engulfing candle forms in the context of an uptrend, it
indicates a continuation signal.
When a bullish engulfing candle forms at the end of a downtrend, the
reversal is much more powerful as it represents a capitulation bottom.