Bullish Engulfing: Bullish Reversal Pattern

Bullish Engulfing is an important bottom reversal pattern. It appears after a downtrend. It's a two candlestick pattern. In this, a large white candle completely engulfs the preceding small black candle. Though it is not necessary for the white candle to engulf the shadows of the previous black candle, it should engulf the entire real body. It's an important bullish reversal signal. Heavy volume on second day of the pattern creates higher probability of trend reversal.

Strategy: Confirmation on the third day in the form of a white candle, large gap up or a higher close can be used to initiate long positions.