What is Engulfing pattern? What are its conditions to qualify? When to buy and Sell?

[V.VEDANAYAGAM]

This is a two day candle stick reversal pattern and engulfing patterns are
1 bullish engulfing pattern which appears at the DOWN trend of the stock to indicate the bullish reversal
2 Bearish engulfing pattern which appears at the UP trend of the stock to indicate the bearish reversal
BULLISH ENGULFING PATTERN
1 stock is in the stream of the DOWN trend
2 first day candle is bear one in conformity of the down trend
3 the very next day candle is bull whose body engulfs(covers) the body of the previous day bear candle
4 shadows of the candle need NOT be taken in to account regarding the engulfing
5 volume should be high on the engulfing day
BUY ONLY on the NEXT DAY(ie ON THE THIRD DAY) if the price of the stock moves ABOVE THE TOP OF THE TWO PREVIOUS DAY CANDLES
(STOP LOSS AT THE BOTTOM OF THE ENGULFING BULL CANDLE)
BEARISH ENGULFING PATTERN mechanism is same as the previous one except here it is in UP trend where BEAR candle engulfs the bull candle
SELL ONLY on the NEXT DAY(ie ON THE THIRD DAY) if the price of the stock falls below the bottom of the two previous day candles(STOP LOSS AT THE TOP OF THE ENGULFING BEAR CANDLE)

[Ramesh]

Bullish Engulfing pattern – when there is recent fall in price, latest bullish body should cover the previous bearish body. Buy when the price cross the top tail of latest bullish body and stop loss at the lower tail of the bullish body.

Bearish Engulfing pattern – when there is recent increase in price, latest bearish body should cover the previous bullish body. SELL when the price cross the lower tail of latest bearish body and stop loss at the upper tail of the bearish body.

 

[Swathi]

Engulfing pattern is when a green candlestick engulfs the whole of previous red body.

[R.Durga Prasad]

After a prior trend, if a Bullish/Bearish body covers the other body fully then it is called as Engulfing Pattern.

Conditions:

Trend should be formed after prior time.

The volume should be more.

Bullish engulfing:

Buy when the green body cover red and sell when the point reaches the stop loss point(lower tail of green body).

Bearish engulfing:

Sell when the red body covers the green body,buy at the stop loss point(end point of red body ).

 

[Naveen]

engulfing pattern is classified in to two types bullish and bearish

conditions:

1.there should be significant price fall .

2.it should cover the previous body.

3.we can buy when price goes beyond the previous upper tail and we can sell if it goes below the lower tail.

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