📉 Bearish Engulfing Candlestick Pattern – The Warning of Trend Reversal

The Bearish Engulfing pattern is one of the most reliable signals of a potential market reversal. It represents the moment when sellers overpower buyers, leading to a strong bearish shift in sentiment.

📘 What Is a Bearish Engulfing Candlestick?

A Bearish Engulfing forms when a small bullish (green) candle is followed by a large bearish (red) candle that completely covers or “engulfs” the previous candle’s body. This shows that the market momentum has shifted from buyers to sellers.

🧭 Key Characteristics

• Occurs after an uptrend or a bullish rally.
• The red candle fully engulfs the prior green candle’s body.
• Signals a potential bearish reversal or correction.
• More powerful when confirmed by high trading volume.

Chart Example

: Bearish Engulfing appearing after a strong uptrend — indicating potential reversal

💡 The Psychology Behind the Pattern

The first green candle shows buyers in control, pushing prices higher. But on the next session, sellers dominate — opening higher, reversing the move, and closing below the previous candle’s low. This action signals a strong shift in sentiment from bullish to bearish.

🔻 Pro Insight: The Bearish Engulfing pattern is more reliable when it appears near resistance levels or after long bullish trends.

⚙️ How to Trade the Bearish Engulfing Pattern

1. Look for the pattern at the top of an uptrend or near a resistance zone.
2. Wait for confirmation — the next candle should close below the engulfing candle’s low.
3. Enter a short (sell) trade below the confirmation candle.
4. Place a stop-loss above the engulfing candle’s high.
5. Set a profit target using support levels or a risk/reward ratio of 1:2 or higher.
   
   
   

🧠 Example Scenario

Imagine a stock has been rising for several days. A small green candle forms, followed by a large red candle that engulfs it completely. This is a classic Bearish Engulfing signal — indicating that buyers have lost control and sellers are taking over. Traders may use this opportunity to exit long positions or open new short positions.

🏁 Conclusion

The Bearish Engulfing candlestick pattern is a clear signal of a shift in market control from bulls to bears. When combined with resistance zones, volume confirmation, and trend analysis, it becomes one of the most effective tools for spotting reversals early.

“When the red candle swallows the green — the bears seize control of the market.”