Engulfing Pattern
As seen in the illustration, the second candle completely overwhelms the prior candle:
- For a pattern to qualify as bullish engulfing, the high of the second candle should hit higher prices than the high of the prior candle. The same scenario applies for the low.
- Ideally, the closing price (top of the body) should also be higher than the highest point of the wick of the prior candle. This scenario gives further significance to the second candle and shows that the bulls have control over the price action now.
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