Mega Bearish Engulfing

 

If second body of the Engulfing pattern engulfs more than one body of the candle, it is a strong bearish reversal pattern. Let’s call it as Mega Bearish Engulfing pattern.

It shows that price is engulfing previous multiple sessions, hence there was a pause of consolidation after the uptrend followed by a strong bearish price action. It suggests a strong trend reversal.

If the single candlestick patterns like Hanging man, shooting star, Gravestone Doji or Star etc. are part the candles being engulfed, the pattern becomes stronger. If there are more lower shadows in the candles being Engulfed, the chances of strong bottom in place are high.

Mega Bearish Engulfing pattern is a strong and reliable bearish reversal pattern.

You will find the Bearish Engulfing & Mega Bearish Engulfing pattern in the scanner as well as system designer section of Definedge software.

Click here to learn more about the pattern.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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