Let’s talk Engulfing candlesticks shall we?
An Engulfing Candlestick is the little blighter whose body completely engulfs that of the previous candlestick’s body. It is one to watch out for- kind of like a weather front, as it is an indicator of a trend reversal.
When a wee green chappie engulfs a red body from the previous period, this is a bullish trend reversal. Look out for markets heading north. And, when a wee red chappie engulfs the green body of the previous trading period, this could mean that the bears are coming out to play and we are going down.
Of course, nothing is 100% certain in this game- you should know that by now. Use Engulfing candlesticks along with other tools to get a better handle on where the market is heading.