Bearish Engulfing
A Bearish Engulfing pattern is a technical analysis signal that indicates a potential reversal in a bullish trend. It occurs when a small bullish candle is followed by a larger bearish candle that completely engulfs the previous one. This pattern suggests that sellers have gained control, signaling a possible decline in price.
Traders often look for the Bearish Engulfing pattern at the top of an uptrend, as it can indicate a shift in market sentiment. Confirmation through subsequent price action is essential, as it helps validate the strength of the reversal signal before making trading decisions.