Bearish Engulfing
A two-candle pattern where a large red body fully engulfs the prior green body, signaling a shift to sellers.
Anatomy
The first candle is a small-to-medium green body. The second is a larger red candle whose real body completely engulfs the first — opening at or above the prior close and closing at or below the prior open.
Market psychology
Buyers controlled the first candle, then sellers arrived with enough force to wipe out the entire prior body in one session. That decisive change in control marks a potential top.
When it matters
Strongest at the end of a rally inside a downtrend (a failed bounce) or at a tested resistance after an uptrend. After a long decline it is weaker because much of the selling may be done.
Common beginner mistakes
- Comparing wicks instead of bodies — the engulfing requirement is body-over-body.
- Reading it as bearish anywhere; in the middle of a range it is unreliable without a resistance level.
Frequently asked questions
How is bearish engulfing different from a dark cloud cover?
A bearish engulfing fully engulfs the prior body. A dark cloud cover only closes more than halfway into the prior green body, not all the way through it. The engulfing is the stronger of the two.
Should I sell on a bearish engulfing alone?
It is more meaningful at resistance or after an extended uptrend, ideally with rising volume on the red candle. Many traders still wait for a follow-through red close before acting.
Reveal real historical charts one candle at a time and practice recognizing this pattern in context.