Engulfing Line (Bullish) Chart Pattern
Implication | Description | Trading Considerations | Criteria that Supports |
Implication
An Engulfing Line (Bullish) indicates a possible reversal of the current downtrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook.
Description
The Engulfing Line (Bullish) occurs when the Real Body for a price bar is larger than the Real body for the previous price bar. In addition, for an Engulfing Line (Bullish), the Real Body of the previous session must be Black (close lower than open) and the Real Body of the second session must be White (close higher than open).
Criteria that Supports
The difference in the sizes of the two Real Bodies can be an important indicator of the signifiance of the Engulfing Line. If the Real Body of the previous session is substantially smaller than the Real Body of the following session then this pattern should be considered more significant. The greater the size difference the more significant the formation.
The longer and higher the inbound trend that leads into the Engulfing Line, the more significant the pattern. Look for heavy volume in the following session. A noticable increase in volume from the previous few sessions is a strong indication that this pattern is more significant.
If the following session "engulfs" more than one session's Real Bodies this pattern is very significant.
What is the Trending123.com Pattern Recognition Scan? The Trending123 Pattern Recognition Scan is one of the most interactive and informative tools available to subscribers, and it’s accessible 24 hours a day right here on Trending123.com. Visit What The Trending123.com Pattern Scan Searches For!
And just to make sure you have all the information you need to use this tool successfully (and profitably!), John Lansing has created multimedia tutorials that walk you through every aspect of this dynamic tool. Check out video tutorials on the following topics: Visit Getting Started!
