Elearnmarkets - Financial Market Learning
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Go To Site
  • Login
Elearnmarkets
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
Webinars
Elearnmarkets - Learn Stock Market, trading, investing for Free
No Result
View All Result
Home Technical Analysis Charts, Patterns & Indicators

OUTSIDE DAY: Bearish Engulfing and Bullish Engulfing Patterns

Elearnmarkets by Elearnmarkets
November 18, 2020
in Charts, Patterns & Indicators, Technical Analysis
Reading Time: 2 mins read
0
3.2k
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

An outside day is a particular trading day when the high is higher than the previous high and the low is lower than the previous low.

The trading range exceeds the range of the previous day on both the upper and the lower side.

An outside day is a wide-range, volatile trading session which encapsulates the entire trading range of the previous day.

The candlestick’s counterpart of the outside day is the Engulfing pattern, which consists of two bars, one small range candle followed by one wide range candle.

Read more: All you need to know about the Japanese Candlestick

There are two types of engulfing patterns distinguished on the basis of the color of second candle and the trend preceding the pattern.

They are the Bearish Engulfing Pattern and the Bullish Engulfing Pattern.

Engulfing pattern is a reversal pattern, and high volumes on the second candle increase the strength of the pattern.

The tail and the wick are short on the second candle.

OUTSIDE DAY
BEARISH ENGULFING PATTERN
BEARISH ENGULFING PATTERN
BULLISH ENGULFING PATTERN
BULLISH ENGULFING PATTERN

Bullish Engulfing Pattern

A bullish engulfing pattern forms after a downtrend.

It indicates a market bottom, at least for some time.

A wide range green candle encapsulated in a down (red) candle.

High volumes on the second candle is a good indication as it suggests increased buying interest in the stock.

Learn the art and science of trading with the help of extensive technical analysis of stocks, the analysis of financial charts, trading strategies and more. Enroll for NSE Academy Certified Technical Analysis course on Elearnamrkets.com

Bearish Engulfing Pattern

A Bearish engulfing pattern forms after an uptrend indicated a top.

The prices are seen moving away from the top after the formation of this pattern.

High volume on the outside bar is usually not observed in this pattern.

In the following chart of Apollo tyres, we can observe an example of Bearish Engulfing and Bullish Engulfing which lead to the turn in the prevailing trend.

Observe how on the Bearish Engulfing the volumes were not high but on the Bullish Engulfing, the volumes supported very well the occurrence of the outside bar.

 

APOLLOTYRE , DAILY, shows Bullish Engulfing and Bearish Engulfing patterns and subsequent reversal in trend.
APOLLOTYRE, DAILY, shows Bullish Engulfing and Bearish Engulfing patterns and subsequent reversal in trend.

 

The Daily chart of Nifty50 Index also has the Bearish Engulfing Pattern formed near the high level of 8800.

Back then no one had thought that the current level of 70 would be a possibility.

See it for your self in the following chart.

 

NIFTY 50 Bearish Engulfing pattern
NIFTY 50 Bearish Engulfing

Bottomline:

We hope that this article helped you to grasp Engulfing Patterns in a clear manner.

However, there are several other equally important candlestick patterns that you need to know about in order to be a better trader or an investor.

We will discuss some other important technical chart patterns in further articles.

Happy Learning!!

 

 

 

Tags: apollotyreBEARISH ENGULFINGbullish engulfingenglishniftyNifty 50outside day
ShareTweetSend
Subscribe To Updates On Telegram Subscribe To Updates On Telegram Subscribe To Updates On Telegram
Previous Post

Budget – What’s in it for you?

Next Post

5 Sectors Majorly Affected by the Budget

Elearnmarkets

Elearnmarkets

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. You can connect with us on Twitter @elearnmarkets.

Related Posts

Technical Analysis

Understanding On-Neck Candlestick Pattern

May 28, 2022
468
Technical Analysis

How to use Rising and Falling Window Candlestick Pattern

May 27, 2022
558
falling window candlestick pattern
Technical Analysis

How to trade using Rising and Falling Three Method Candlestick Patterns

May 26, 2022
1.7k
Technical Analysis

How to use Bullish and Bearish Counterattack Candlestick Patterns

May 25, 2022
1.5k

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

Facebook-f Twitter Instagram Linkedin-in Youtube Telegram

Download App

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

Get Articles On Email

Enter your email address:

Categories

  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Technical Analysis
  • Marketshala
  • Miscellaneous

© 2022 Elearnmarkets . All Rights Reserved

  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

Get Elearnmarkets App

No Result
View All Result
  • Article Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • Hindi
    • Bengali
    • English
  • Courses
  • Webinars

© 2020 Elearnmarkets All Rights Reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
ELM School

LOVING OUR BLOGS?

Explore more content for free at ELM School.

Start reading & learning from various text-based modules covering all aspects of finance from today!

VISIT ELM SCHOOL