This article has been translated from English to Gen Z Slang.

Ayyo, the Bearish Engulfing pattern is like those plot twist moments in your fav TV show. 📺 Basically, it's a two-candle drama scene starring an up (white or green) candlesticks getting totally schooled by a bigger down (black or red) candlestick which just swallows it whole. Basically, it got its name 'cause the second candle is like, "Yo, first candle, I'm gonna gobble you up." 😅

Bearish Engulfing Patter

This Bearish Engulfing thing is totes a bearish reversal pattern. 🍃 Usually, you’ll spot it at the peak of an uptrend when the market is acting like it's on something.

If you're on the lookout for the Bearish Engulfing pattern, keep your eyes peeled for these clues:

  • There should be an obvious uptrend happening—like, “woah, why is it going up like that?” type of vibe.
  • The debut candle's gotta be a white (bullish) candlestick, peeps.
  • Then, the follow-up candle needs to be black (bearish), coming in with the "Big Boss" energy. 🖤
  • The black candlestick has to completely cloak the white candle (yes, totally "engulf" it). That means the top of the black candle's gotta be above the top of the white, and the bottom hanging lower... you know, flexing its size.

On the flip side, the opposite is called the Bullish Engulfing pattern. 🌟

Now, this different scenario is all about the Bullish Engulfing pattern popping up in a downtrend. Here, a down (black or red) candle gets dunked on by a white candle.

Vibes & Meaning

Before the Bearish Engulfing show kicks off, prices need to be defo in an uptrend. Basically, the price gaps upward but then, BOOM, the market vibe shifts like your fave artist dropping a surprise album. 💥 The sellers come in hard, making prices fall faster than a TikTok star's hype. Basically, the candle ends up closing way lower than that previous up (white or green) candle.

This second candle is kinda like a heads-up that mood's shifting, and you should expect a trend reversal like “SURPRISE!”

For max drama, the pattern gets more legit when the open price of the engulfing candle is way above the close of the first candle and when the close of the engulfing candle is waaay below the open of the first candle. 🤚

The more the second candle looks like it's been hitting the gym compared to the first candle, the more #power the bears have. 🏋️‍♀️

For some deep dive detective work, scope out these deets:

  • If the previous uptrend is dramatic AF, the pattern will be hella effective.
  • The taller the top and lower the bottom of the engulfing candle’s body, the more it flexes its strength.