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Engulfing patterns indicate strong market sentiment from "summary" of Japanese Candlestick Charting Techniques by Steve Nison
Engulfing patterns are two-candlestick reversal patterns that can provide valuable information about market sentiment. These patterns consist of two candles, where the body of the second candle completely engulfs the body of the first candle. The first candle can be of any color, but it is typically a small-bodied candle. The second candle, on the other hand, is usually a large-bodied candle that completely engulfs the first candle. The significance of engulfing patterns lies in the message they convey about market sentiment. When an engulfing pattern forms, it indicates a shift in the balance of power between buyers and sellers. In the case of a bullish engulfing pattern, the second candle's large body suggests that buyers have taken control and are exerting strong pressure on the market. This can be a signal that a bullish ...Similar Posts
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