Bullish Engulfing Candlestick..
The Bullish Engulfing candlestick is a strong bullish reversal pattern and is sometimes called a key reversal pattern. It signals a significant shift in directional sentiment from bearish to bullish.
A prior downtrend is required and during the formation of the Bullish Engulfing candlestick the market gaps down. The market then rallies up to close above open of the previous candlestick.
Therefore, the bodies of the two candlesticks are opposite in direction and colour, from red to green, and the Bullish Engulfing candlestick, which âengulfsâ the previous candlestick, has a lower open and a higher close. In this case, the upper and lower shadows are not important.
