Saturday, January 11, 2014

ENGULFING




BULLISH ENGULFING: a large up body engulfing a preceding smaller down body, happening during a downtrend. The up body does not necessarily engulf the shadows of the down body but totally engulfs the body itself, the length of the first down candlestick in Bullish Engulfing is not important, it can even be a Doji, the second one is a normal or long up candlestick, the up body is longer than the previous down body. The buying pressure overcomes selling and finally the market closes above the open of the previous day, the downtrend is damaged, prices must cross above the last close for confirmation. 


BEARISH ENGULFING: A large down body engulfing a preceding smaller up body, happening during an uptrend. The down body does not necessarily engulf the shadows of the up body but totally engulfs the body itself, the length of the first up candlestick in Bearish Engulfing is not important, it can even be a Doji, the second one is a normal or long down candlestick, the down body is longer than the previous up body. The selling pressure overcomes buying and finally the market closes below the open of the previous one, the uptrend is damaged, prices must cross below the last close for confirmation.

No comments:

Post a Comment