Bearish Engulfing
A two-candle reversal where a large down candle completely engulfs the prior up candle's body — momentum has flipped to sellers.
In a bearish engulfing, a small green (up) candle is followed by a larger red (down) candle whose body opens at or above the prior close and closes below the prior open, fully covering it. The swing from buying to heavy selling in one session is the warning.
It carries the most weight after a rally or at resistance, on rising volume. It's the bearish mirror of the bullish engulfing.
How it has actually played out
- Bearish Engulfing: across 7,027 signals on US stocks in the last 150 days, price was lower a week later 54.9% of the time (+0.7 pts vs. an ordinary session) and lower a month later 58.0% (-0.6 pts).
Measured from the signal-day close, no stops or costs, versus every session of the same stocks over the same window. A base rate, not a prediction.
On StockSetups
Bearish engulfing is in StockSetups' bearish candlestick set; on a long-only board it flags fading momentum on an extended name rather than a short signal.
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