Bearish Engulfing Pattern

🔎 Overview

The Bearish Engulfing Pattern is a strong two-candle reversal formation that signals a potential shift from an uptrend to a downtrend.
It occurs when a small bullish (green) candle is immediately followed by a large bearish (red) candle that completely engulfs the prior candle’s body.
This shows a clear shift in market psychology — buyers initially push the price higher, but sellers step in with force and erase those gains, marking the start of bearish momentum.

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📔 Concept

A Bearish Engulfing occurs when:
1️⃣ The first candle is a small green candle continuing the uptrend.
2️⃣ The next candle is a large red candle whose body completely engulfs the green candle’s body.
3️⃣ This pattern signals that sellers have regained control after buyer exhaustion.

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📌 How to Use

✅ Validation → The candle must close below the open of the red candle to confirm bearish reversal.
❌ Devalidation → If price closes above the close of the red candle before validation, the signal fails.
This structured confirmation helps filter false breakouts and define clear risk levels.

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📊 Chart Explanation

• Symbol → MGL
• Timeframe → 1D
• On 15 Oct 2025, a small green candle formed, continuing the uptrend.
• On 16 Oct 2025, a large red candle engulfed the previous green body — confirming the Bearish Engulfing Pattern.
• On 17 Oct 2025, price broke down further, validating the bearish reversal.
This sequence highlights how quickly market sentiment shifted from bullish to bearish control.

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👀 Observation

• The Bearish Engulfing is most reliable near swing highs or resistance zones.
• High volume on the engulfing candle strengthens the reversal signal.
• Combining this pattern with confirmation tools like RSI, Supertrend, or Moving Averages
improves accuracy.

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💡 Conclusion

The Bearish Engulfing Pattern marks a clear shift in control from buyers to sellers.
Once validated, it indicates a high-probability reversal setup with defined stop-lose and target zones based on structure or risk-reward multiples.

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⚠️ Disclaimer

📘 For educational purposes only.
🙅 Not SEBI registered.
❌ Not a buy/sell recommendation.
🧠 Purely a learning resource.
📊 Not Financial Advice.