The Bullish Engulfing is a two-candle pattern at the bottom of a downtrend. The first candle is bearish (red); the second is a larger bullish (green) candle whose real body completely engulfs the first candle's real body — opening below and closing above it.
Bulls overwhelm bears completely in a single session. The engulfing candle not only recovers all the previous session's losses — it surpasses them. This decisive shift in momentum signals that buying pressure has overtaken selling pressure at this price level.
Particularly reliable at key support levels or after oversold RSI readings. Expect +4–9% over 5–12 trading days. Pattern is self-confirming — no additional confirmation candle required, though volume above average increases conviction.
Example Chart
Large green body fully engulfs the prior red body