The bullish engulfing (tsutsumi) candlestick pattern (view full size chart) is one of the double candlestick patterns (i.e. it consists of two individual candlesticks), and it is a bullish pattern.
The bullish engulfing candlestick consists of a downward candlestick (e.g. a red candlestick), followed by an upward candlestick (e.g. a green candlestick) that opens with a gap below the close of the previous candlestick, and closes above the open of the previous candlestick.
Use In Trading
The bullish engulfing pattern can occur in a number of different contexts (e.g. at the beginning of a trend, during a trend, at the end of a trend, etc.), but it is most relevant when it occurs during a significant downward trend. The bullish engulfing is often used as an indication of the end of a downward trend, and therefore can be used as both a trade entry and a trade exit pattern (i.e. an exit from a short trade, and/or an entry into a long trade).
