Bearish Engulfing Pattern

The bearish engulfing pattern is formed by two consecutive candlesticks, where the body of the second bearish candle completely engulfs the body of the preceding bullish candle.

Firstly, the initial candle is a bullish candle indicating the dominance of buyers. However, the subsequent candle is a bearish candle, and its body entirely engulfs the body of the preceding bullish candle. This suggests that sellers are quickly taking control of the market. The appearance of the bearish engulfing pattern is often regarded as a potential sell signal, signaling a reversal in price and the beginning of a downtrend in the market.