Engulfing Line and Last Engulfing Line

Engulfing Line

– Normally it should be a signal of reversal of the current Trend.

– You can find it in the variants: Bullish and Bearish, depending on the Trend in which is located.

– Is one of the most reliable Candlestick Pattern; very often is not even required a confirmation from the next Candles (Although it should be better).

– If this Pattern is located near an High or Low of the current Trend, it’s more reliable.

– General Description: 1) The Real Body of the Second Candle “engulfs” the Real Body of the First Candle; 2) The Second Candle has a different color from the First Candle; 3) The volume of trades should be high during the formation of the Second Candle.

– As you can see from the previous image, the Bullish Engulfing occurs during a Downtrend; normally it should be a signal of bullish reversal.

– Whereas the Bearish Engulfing occurs during an Uptrend; normally it should be a signal of bearish reversal.

Last Engulfing Top/Bottom

– Is a variant of the Engulfing Line; you can find it in the variants: Top and Bottom, depending on the Trend in which is located.

– Last Engulfing Top: 1) It occurs during an Uptrend; 2) The First Candle is black; whereas the Second Candle is long and white, that “engulfs” the Real Body of the First Candle.

– Last Engulfing Bottom: 1) It occurs during a Downtrend; 2) The First Candle is white; whereas the Second Candle is long and black, that “engulfs” the Real Body of the First Candle.