The bearish 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 bearish pattern.
The bearish engulfing candlestick consists of a upward candlestick (e.g. a green candlestick), followed by a downward candlestick (e.g. a red candlestick) that opens with a gap above the close of the previous candlestick, and closes below the open of the previous candlestick.
Use In Trading
The bearish 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 upward trend. The bearish engulfing is often used as an indication of the end of a upward trend, and therefore can be used as both a trade entry and a trade exit pattern (i.e. an exit from a long trade, and/or an entry into a short trade).
