Bullish Engulfing Patterns
A bullish engulfing candle is a pattern that can signal an upcoming upwards movement. It comes into play after a time of downward movement.
The bullish engulfing pattern features a bearish candle followed by a larger bullish candle. The idea of the name refers to the bullish candle “engulfing” the bearish one before it.
The reason this pattern indicates an upwards movement is because it signifies a bull holding more strength than a bear. This change in strength symbolizes a reversal of momentum that’s likely to continue.
Bearish Engulfing Patterns
A bearish engulfing candle is just the opposite. This pattern signals an upcoming downward movement.
The bearish engulfing pattern features a larger bearish candle following a smaller bullish candle. The idea of the name refers to the bearish candle “engulfing” the bullish one before it.
The reason for this reversal of momentum is that bears have started to out-strengthen the bulls, and the momentum might continue.
Tweezer Bottoms and Tops
Another type of dual candlestick pattern is tweezer bottoms and tops. It signals a reversal after an extended upward or downward movement.
A tweezer bottom follows an extended downward movement and signals an upwards reversal. The first candlestick for a tweezer bottom is bearish with a moderate-length shadow below. The second candlestick is bullish with an equal length body and shadow sharing the same as the first candle.
A tweezer top is just the opposite of a tweezer bottom, following an extended upward movement and signaling a downward reversal. The tweezer top pattern has a bullish candle with a shadow on top, followed by a bearish candle with a shadow on top.