The Bearish Candlestick - A Market Top?
-
In the aftermath of reaching an all-time high during the early hours of the trading session yesterday, the Indian equity markets experienced a notable shift in momentum as the day progressed. The latter half of the trading day was notably dominated by bears, with the market sentiment taking a downturn.
Amidst this bearish turn, one particular candlestick pattern that swiftly comes to mind, even without glancing at the charts, is the Bearish Engulfing pattern.
The Bearish Engulfing Candlestick pattern is a significant reversal pattern in technical analysis that often signals a potential trend reversal from bullish to bearish. This pattern consists of two candles, with the first being a smaller bullish candle followed by a larger bearish candle that completely engulfs the body of the preceding candle.
The practical aspect of the Bearish Engulfing pattern lies in its ability to reflect a shift in market sentiment. When this pattern occurs after a prolonged uptrend, it suggests that the bears have gained control, overpowering the bulls and potentially indicating a reversal in the prevailing trend. Traders consider selling or taking short positions, anticipating a downward price movement.
Here are some stats of sectorial indices and stocks were Bearish Engulfing pattern is visible.
Let's look at the stats on the number of stocks were this bearish pattern is visible.
I have scanned this pattern using the scanner feature of RZone.
You can find the stocks list by following this steps.
- Go to Price Scanner
- Select Candlestick Scanner
- Select the Group
- Under Condition, Select Engulfing Pattern Bearish
- Finally, Click on Scan and you are ready with the stock list.
Have a Happy Trading Day!
-
Thanks Brijesh Sir.
-
Brijesh Sir,
This engulfing candle pattern will work better in weekly time frame? This is for those who like medium term or long term view... -
@Rajeev Talasikar It works on all TF.
