Engulfing Pattern
An engulfing pattern is a two-candle pattern where the second candle's body completely covers the first candle's body in the opposite direction — bullish after a fall, bearish after a rise.
One candle can hint at a change; two can make the case more strongly. In an engulfing pattern, the second candle swallows the first one whole, showing that the other side of the market has suddenly taken charge.
- Category
- Technical Analysis
- Reading time
- 4 min
- Also called
- Bullish engulfing, Bearish engulfing, Engulfing candle
- Updated
The engulfing pattern in plain words
It is a reversal pattern: bearish at the end of an uptrend, bullish at the end of a downtrend.1
Only the bodies count: the second body must cover the first one's open and close, while the wicks don't matter.1
In a bullish version, the second body must totally engulf the first.2 The bearish version mirrors it.3
How to spot and use an engulfing pattern
Check the first candle
Make sure the first candle isn't a doji — a tiny body is too easy to cover.2
Check the engulfing
The second body must totally engulf the first body.2
Judge the size
The larger the second candle and the greater the engulfing, the stronger the signal.2
Check volume
Look for higher volume on the engulfing candle as a sign of conviction.4
Wait for confirmation
Most patterns require confirmation, ideally within 1 to 3 days.2
Worked examples
Example 1 — Bullish engulfing at support
Valid bullish engulfingA hypothetical stock falls to $25 support. Day 1: opens $25.60, closes $25.10. Day 2: opens $25.00, closes $26.00.
| Day 1 body | $25.10–$25.60 |
| Day 2 body | $25.00–$26.00 |
The second body fully covered the first, and appearing at strong support made the signal more convincing.4
Example 2 — Bearish engulfing after a rally
Bearish warningAfter a rise from $60 to $75, day 1 closes $75.40 (opened $75.00); day 2 opens $75.60 and closes $74.50.
| Day 1 body | $75.00–$75.40 |
| Day 2 body | $74.50–$75.60 |
The black body engulfs the white one within an uptrend, suggesting buyers ran out of momentum.4
Example 3 — Wrong place
Not a reversal signalA bullish engulfing appears at a new 52-week high of $90.
| Location | New high |
| Prior trend | Up |
At fresh highs there was no downtrend to reverse, so this was not a true bullish engulfing.2
Bullish vs bearish engulfing
| Aspect | Bullish | Bearish |
|---|---|---|
| Prior trend | Down | Up |
| First candle | Small bearish | Small bullish |
| Second candle | Larger bullish | Larger bearish |
| Confirmation | Further upside | Further downside |
How traders use engulfing patterns
Entry timing
Entering after confirmation near Support and Resistance.
Exit warning
Taking profit when a bearish engulfing appears in an extended Trend.
Volume check
Combining the pattern with Volume for conviction.
Stop placement
Placing a Stop Loss beyond the engulfing candle's extreme.
Advantages and disadvantages
Advantages
- Clear, rule-based definition.
- Shows a sharp shift in control in just two candles.
- Gives a natural stop level at the pattern's extreme.
Disadvantages
- Needs confirmation, which can come late.
- Frequent on short timeframes, with many false signals.
- Meaningless without a prior trend.
- Large engulfing candles can mean a wide stop.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
No prior trend
Calling it a reversal when there is nothing to reverse.
Engulfing a doji
Treating a tiny first candle as meaningful.
Skipping confirmation
Entering on the pattern alone.
Ignoring stop distance
Using a stop far too tight for a large engulfing candle.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Two candles, opposite directions.
- The second body covers the first.
- Needs a prior trend to reverse.
- Volume and location add weight.
- Wait for confirmation.
Frequently asked questions
Do the shadows need to be engulfed?
Is a bigger engulfing candle better?
Can it fail?
Further learning
- Candlestick
The building block of the pattern.
- Reversal
What the pattern signals.
- Volume
How to judge conviction.
- Stop Loss
Where to place protection.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Candlestick Pattern Dictionary (opens in a new tab) Checked .
- StockCharts ChartSchool. Candlestick Bullish Reversal Patterns (opens in a new tab) Checked .
- StockCharts ChartSchool. Candlestick Bearish Reversal Patterns (opens in a new tab) Checked .
- CMC Markets. Candlestick Patterns Explained: A Beginners Guide (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Bullish Engulfing (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.