Bullish Engulfing
A two-candle formation in which a rising candle's body completely covers the preceding falling candle's body.
How it is identified
Test: previous Close < previous Open; current Open <= previous Close and current Close >= previous Open
Unit
qualitative
In depth
Two-candle formations are somewhat more robust than single candles because they encode a relationship rather than one period's shape, and the engulfing condition can be stated precisely. The strict definition compares bodies, not the full ranges, which is the detail most often applied loosely. Larger relative size of the engulfing candle is conventionally treated as more meaningful, since it means the period reversed more of the prior move. The formation is defined here; whether price rises afterwards is not predicted.
Worked example
Day one opens ₹500 and closes ₹488. Day two opens ₹486 and closes ₹504. The second body spans ₹486 to ₹504 and fully covers ₹488 to ₹500, so the condition is met exactly.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Bullish Engulfing” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.