The Bearish engulfing is a reversal pattern appears at the end of bullish trend. It consists of Red real body that engulfs the previous Green real body during up-trend. This pattern is witnessed in Mahindra & Mahindra on 18-Mar-2019. The conditions and qualification of the patters are explained below.
Conditions and Qualification:
1) The prior trend should be Bullish – Yes. bullish trend witnessed prior to the engulfing.
2) The latest Bearish body should cover the previous bullish body. – Yes. This is confirmed.
3) The slight increase in the trading volume is expected during any of the last two days.
The Trading plan: SHORT.
Entry Price: Rs.682 (Below the lowest point of Engulfing day & Previous day)
Stoploss: Rs.704 (Top point of the engulfing )
Target: Rs.660 (Considering the Risk to Reward of 1:1)
The trading result: Target achieved in 6 days.