Bearish Engulfing Pattern

A two-candle bearish reversal pattern in which a large red (bearish) candle's real body completely engulfs the real body of the preceding smaller green (bullish) candle. The pattern signals that sellers have overwhelmed buyers and suggests a potential shift from bullish to bearish momentum, particularly when it appears after a sustained uptrend or at a key resistance level. Traders often seek confirmation from the following candle or increased volume before acting on the signal.