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Definition

In candlestick terminology, a multiple candlestick line pattern; a major reversal signal with two opposing-color real bodies making up the pattern (also referred to as a tsutsumi). An engulfing pattern is either bullish or bearish, and is usually very easy to identify. The bullish engulfing pattern consists of a green candle engulfing its preceding red candle. The bearish engulfing pattern is the opposite to this, presenting a red candle engulfing it's preceding green candle. The pattern is found to be more accurate and reliable when the engulfing candle's high and low engulfs the previous candle's high and low.

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