The candle stick analysis was developed by the Japanese to analyse the price trends. This method uses candle stick charts to predict the market trend. Candlestick analysis provides short term trend analysis
candlesticks generally used by daily and weekly traders. volume plays an important role as higher the volume will confirm high ratio of sucess
when the previous day body is completely covered by today’s body is identified as engulfing pattern.
Condition for Bullish Engulfing :
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The recent fall in price should be witnessed.
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The bullish body should cover the previous days bear body.
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There should be significant volume should be noticed during the formation of engulfing.
buy when you see the price crossing the engulfing days high,
bearish engulfing – red body should cover the previous days green body completely, trading volume might increase, the bearish engulfing should appear after a rise in prices, sell when the prices crosses the previous days low