Definition:
A BULLISH ENGULFING PATTERN IS A WHITE CANDLESTICK PATTERN THAT CLOSES HIGHER THAN THE PREVIOUS DAYS'S OPENING AFTER OPENING LOWER THEN THE PREVIOUS DAYS'S CLOSE. IT CAN BE IDENTIFIED WHEN A SMALL BLACK CANDLE , SHOWING A BEARISHS TREND , IS FOLLOWED THE NEXT DAY BY A LARGE WHITE CANDLESTICK SHOWUNG A BULLISH TREND IS FOLLOWED THE NEXT DAY BY A LARGE WHITE CANDLE STICK SHOWING A BULLISH TREND THE BODY OF WHICH COMPLETE OVERLAPSE THE BODY OF THE PREVIOUS DAY CANDLE.
UNDERSTANDING BULLISH ENGULFING PATTERN:
THE PATTERN IS A TWO CANDLE REVERSAL PATTERN THE SECOND CANDLE COMPLETELY OVERLAP THE REAL BODY OF THE FIRST ONE WITHOUT REGARD TO THE LENGTH OF THE TAIL SHADOW THE PATTERN APPEARS IN A DOWN TREND AND IS A COMBINATION OF ONE DOOR CANDLE FOLLOWED BY A LARGER HOLLOW CANDLE ON THE SECOND DAY OF THE PATTERN THE PRICE OPENS LOWER THAN THE PREVIOUS LOW YET BUYING PRESSURE PUSH IS THE PRICE UP TO A HIGHER LEVEL THEN THE PREVIOUS HIGH
WHAT DOES A BULLISH ENGULFING PATTERN TELL YOU?
A PATTERN IS NOT COMPLETELY INTERPRETED AS SIMPLY AVOID CANDLE REPRESENTING UPWARD PRICE MOVEMENT FOR A BULLISH PATTERN TO FORM THE STOCK MUST OPEN THE STOCK MUST OPEN AT ON DAY ONE IF THE PRICE DID NOT GAP DOWN THE BODY OF THE WHITE CANDLESTICK COULD NOT HAVE A CHANCE TO OVERLAP IN THE OVERLAP IN THE BODY OF PREVIOUS DAYS BLACK CANDLE. BECAUSE THE STOCK BECAUSE THE STOCK BOTHOPENS LOWER THAN IT CLOSED ON DAY 1 AND CLOSE HIGHER THAN IT OPENED ON DAY ON THE WHITE CANDLESTICK IN A BULLISHOPENS LOWER THAN IT CLOSED ON DAY 1 AND CLOSE HIGHER THAN IT OPENED ON DAY ON THE WHITE CANDLESTICK IN A BULLISH PATTERNREPRESENTS A DAY IN WHICH BEARS CONTROL THE PRICE ON THE STOCK IN THE MORNING ONLY TO HAVE BULLS TAKE OVER BY THE TAKE OVER BY THE ENDTHE WHITE CANDLESTICK OF A BULLISH PATTERN TYPICALLY HAVE A SMALL UPPER WEEK IF ANY ADD ME THE STOCK CLOSED AT OR NEAR ITS HIGHEST PRICE SUGGESTING THAT AT OR NEAR ITS HIGHEST PRICE SUGGESTING THAT THEDAY ENDED WELL THE PRICE WAS STILL UPWARD THE LACK OF AN UPPER WAKE MAKES IT MORE LIKELY THAT THE NEXT DAY WILL PRODUCEDAY ENDED WELL THE PRICE WAS STILL UPWARD THE LACK OF AN UPPER WAKE MAKES IT MORE LIKELY THAT THE NEXT DAY WILL PRODUCE AND AND OTHER CANDLEST STATE THAT WILL CLOSE HIGHER THAN THE BULISH PATTERN THROUGH IT ALSO POSSIBLE THAT THE NEXT DAY WILL PRODUCE A BLACK CANDLESTICK THROUGH IT ALSO POSSIBLE THAT THE NEXT DAY WILL PRODUCE A BLACK CANDLESTICK ALSOTHE NEXT DAY IT ALSO PRODUCE A CANDLE THAT WILL HELP YOU TO FIND THE TREND OF THE MARKET.
BULLISH ENGULFING VS BEARISH ENGULFING:
THESE TWO PATTERNS ARE OPPOSITE OF 1 AND OTHER THESE PATTERN OCCURS AFTER A PRICE MOVES HIGHER AND INDICATES LOWER PRICE TO COMETHESE TWO PATTERNS ARE OPPOSITE OF 1 AND OTHER THESE PATTERN OCCURS AFTER A PRICE MOVES HIGHER AND INDICATES LOWER PRICE TO COMEHERE THE FIRST CANDLE IN THE TWO CANDLE PATTERN IS A UP CANDLE THE NEXT CANDLE IS THE LARGER DOWN CANDLE WITH THEHERE THE FIRST CANDLE IN THE TWO CANDLE PATTERN IS A UP CANDLE THE NEXT CANDLE IS THE LARGER DOWN CANDLE WITH THE REAL BODY THAT FULLY OVERLAP THE SMALLER UP CANDLE.
EXAMPLE OF BULLISH ENGULFING PATTERN:
AS A HISTORICAL EXAMPLE LET'S CONSIDER PHILIP MORRIS TALK THE COMPANIES HERE WE ARE A GREAT LONG IN 2011 AND REMAINING IN AN UP TREND IN 2012 THROUGH THE STOCK WAS REPRETING ON JANUARY 13 2012ABOLISH PATTERN OCCURRED THE PRICE JUMPED FROM AN OPEN OF 76 22 INTO A CLOSE OUT THE DAY AT 37 32 SEND THE POLICE DAY DRAFT THE PERIOD DAYS IN TODAY RANGE WHERE THE STOCK FINISH DOWN MARGINALLY THE MOVE SHOW THAT THE BOOLES WERE STILL ALIVE AND OTHER WAY IN THE UP TREND COULD OCCUR.
A BULLISH ENGULFING PATTERN IS A WHITE CANDLESTICK PATTERN THAT CLOSES HIGHER THAN THE PREVIOUS DAYS'S OPENING AFTER OPENING LOWER THEN THE PREVIOUS DAYS'S CLOSE. IT CAN BE IDENTIFIED WHEN A SMALL BLACK CANDLE , SHOWING A BEARISHS TREND , IS FOLLOWED THE NEXT DAY BY A LARGE WHITE CANDLESTICK SHOWUNG A BULLISH TREND IS FOLLOWED THE NEXT DAY BY A LARGE WHITE CANDLE STICK SHOWING A BULLISH TREND THE BODY OF WHICH COMPLETE OVERLAPSE THE BODY OF THE PREVIOUS DAY CANDLE.
UNDERSTANDING BULLISH ENGULFING PATTERN:
THE PATTERN IS A TWO CANDLE REVERSAL PATTERN THE SECOND CANDLE COMPLETELY OVERLAP THE REAL BODY OF THE FIRST ONE WITHOUT REGARD TO THE LENGTH OF THE TAIL SHADOW THE PATTERN APPEARS IN A DOWN TREND AND IS A COMBINATION OF ONE DOOR CANDLE FOLLOWED BY A LARGER HOLLOW CANDLE ON THE SECOND DAY OF THE PATTERN THE PRICE OPENS LOWER THAN THE PREVIOUS LOW YET BUYING PRESSURE PUSH IS THE PRICE UP TO A HIGHER LEVEL THEN THE PREVIOUS HIGH
WHAT DOES A BULLISH ENGULFING PATTERN TELL YOU?
A PATTERN IS NOT COMPLETELY INTERPRETED AS SIMPLY AVOID CANDLE REPRESENTING UPWARD PRICE MOVEMENT FOR A BULLISH PATTERN TO FORM THE STOCK MUST OPEN THE STOCK MUST OPEN AT ON DAY ONE IF THE PRICE DID NOT GAP DOWN THE BODY OF THE WHITE CANDLESTICK COULD NOT HAVE A CHANCE TO OVERLAP IN THE OVERLAP IN THE BODY OF PREVIOUS DAYS BLACK CANDLE. BECAUSE THE STOCK BECAUSE THE STOCK BOTHOPENS LOWER THAN IT CLOSED ON DAY 1 AND CLOSE HIGHER THAN IT OPENED ON DAY ON THE WHITE CANDLESTICK IN A BULLISHOPENS LOWER THAN IT CLOSED ON DAY 1 AND CLOSE HIGHER THAN IT OPENED ON DAY ON THE WHITE CANDLESTICK IN A BULLISH PATTERNREPRESENTS A DAY IN WHICH BEARS CONTROL THE PRICE ON THE STOCK IN THE MORNING ONLY TO HAVE BULLS TAKE OVER BY THE TAKE OVER BY THE ENDTHE WHITE CANDLESTICK OF A BULLISH PATTERN TYPICALLY HAVE A SMALL UPPER WEEK IF ANY ADD ME THE STOCK CLOSED AT OR NEAR ITS HIGHEST PRICE SUGGESTING THAT AT OR NEAR ITS HIGHEST PRICE SUGGESTING THAT THEDAY ENDED WELL THE PRICE WAS STILL UPWARD THE LACK OF AN UPPER WAKE MAKES IT MORE LIKELY THAT THE NEXT DAY WILL PRODUCEDAY ENDED WELL THE PRICE WAS STILL UPWARD THE LACK OF AN UPPER WAKE MAKES IT MORE LIKELY THAT THE NEXT DAY WILL PRODUCE AND AND OTHER CANDLEST STATE THAT WILL CLOSE HIGHER THAN THE BULISH PATTERN THROUGH IT ALSO POSSIBLE THAT THE NEXT DAY WILL PRODUCE A BLACK CANDLESTICK THROUGH IT ALSO POSSIBLE THAT THE NEXT DAY WILL PRODUCE A BLACK CANDLESTICK ALSOTHE NEXT DAY IT ALSO PRODUCE A CANDLE THAT WILL HELP YOU TO FIND THE TREND OF THE MARKET.
BULLISH ENGULFING VS BEARISH ENGULFING:
THESE TWO PATTERNS ARE OPPOSITE OF 1 AND OTHER THESE PATTERN OCCURS AFTER A PRICE MOVES HIGHER AND INDICATES LOWER PRICE TO COMETHESE TWO PATTERNS ARE OPPOSITE OF 1 AND OTHER THESE PATTERN OCCURS AFTER A PRICE MOVES HIGHER AND INDICATES LOWER PRICE TO COMEHERE THE FIRST CANDLE IN THE TWO CANDLE PATTERN IS A UP CANDLE THE NEXT CANDLE IS THE LARGER DOWN CANDLE WITH THEHERE THE FIRST CANDLE IN THE TWO CANDLE PATTERN IS A UP CANDLE THE NEXT CANDLE IS THE LARGER DOWN CANDLE WITH THE REAL BODY THAT FULLY OVERLAP THE SMALLER UP CANDLE.
EXAMPLE OF BULLISH ENGULFING PATTERN:
AS A HISTORICAL EXAMPLE LET'S CONSIDER PHILIP MORRIS TALK THE COMPANIES HERE WE ARE A GREAT LONG IN 2011 AND REMAINING IN AN UP TREND IN 2012 THROUGH THE STOCK WAS REPRETING ON JANUARY 13 2012ABOLISH PATTERN OCCURRED THE PRICE JUMPED FROM AN OPEN OF 76 22 INTO A CLOSE OUT THE DAY AT 37 32 SEND THE POLICE DAY DRAFT THE PERIOD DAYS IN TODAY RANGE WHERE THE STOCK FINISH DOWN MARGINALLY THE MOVE SHOW THAT THE BOOLES WERE STILL ALIVE AND OTHER WAY IN THE UP TREND COULD OCCUR.
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