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  • Trading Signals for Engulfing Pattern

Trading Signals for Engulfing Pattern

  • Posted by Trading Campus
  • Date March 12, 2017
  • Comments 3 comments

In the previous article, we have seen how an engulfing pattern looks like. In this article let us look at the conditions which improve the probability of a trend reversal when an engulfing pattern is observed.

  1. In an uptrend/downtrend, when a candle with very small body (like spinning top and Doji) is engulfed by a candle with large body it strengthens the reversal. The small body shows us how the strength of prevailing trend is weakening and the large body of the engulfing candle confirms the reversal.
  2. A heavy volume in the second candle i.e. the engulfing candle, will further strengthen the trend reversal.
  3. If an engulfing pattern is observed after a sharp run in one direction, it has a high success ratio, since the market is overbought/oversold and people look for profit taking.
  4. The high of a bearish engulfing pattern acts as a resistance and the low of a bullish engulfing patterns acts as a support.

Once can go short keeping the high of a bearish engulfing candle as stop loss and go long keeping the low of bullish engulfing candle as the stop loss. For confirmation of the bearish engulfing  patterns, one can wait for another day for the close to be lower than engulfing candles close. And for confirmation of the bullish engulfing  patterns, one can wait for another day for the close to be higher than engulfing candles close.

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Engulfing Pattern
March 12, 2017

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March 15, 2017

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Company Summary

Bajaj Electricals Limited is engaged in engineering and projects; power distribution, illumination and consumer durables businesses.

It has a range of domestic and kitchen appliances comprising water heaters, room heaters, coolers, irons, mixers, induction cookers, toasters, kettles, microwave, rice cookers, gas stoves, non-electrical kitchen aids and pressure cookers.

It offers ceiling, table, pedestal, wall, fresh air and industrial fans, and lighting solutions, such as light sources, light emitting diode-based lighting products, domestic luminaires, torches and lanterns.

Key Highlights of Company Business

Segments and Products

The Company's business segments consist of

  1. Lighting;
  2. Consumer Durables;
  3. Engineering & Projects,

The Lighting segment includes lamps, tubes and luminaries.

The Consumer Durables segment includes appliances and fans.

The Engineering & Projects segment includes transmission line towers, telecommunications towers, highmast, poles and special projects.

The Others segment includes diecasting and wind energy.

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