<p>Bullish Engulfing is a two‑candle candlestick pattern that signals a possible shift from a downtrend to an uptrend. It occurs when a small red (bearish) candle is followed by a larger green (bullish) candle whose body completely covers, or engulfs, the previous candle’s body. Traders watch for this formation near support levels as an early hint of buying pressure.</p>

<h2>How It Works</h2>
<p>The pattern requires three conditions:</p>
<ul>
<li>The first candle is bearish, closing lower than its open.</li>
<li>The second candle is bullish, closing higher than its open.</li>
<li>The body of the second candle fully envelops the body of the first candle, meaning its open is below the first candle’s close and its close is above the first candle’s open.</li>
</ul>
<p>Volume often rises on the engulfing candle, reinforcing the conviction behind the move. The pattern is most reliable when it appears after a clear series of declining prices and near a known support zone or moving‑average bounce.</p>

<h2>Why It Matters</h2>
<p>Recognizing a Bullish Engulfing helps traders time entries for long positions or exit short trades. For example, if a stock has fallen three consecutive days and forms a Bullish Engulfing candle at the 50‑day moving average, a trader might place a buy order just above the high of the engulfing candle, setting a stop‑loss below its low. While no pattern guarantees success, the Bullish Engulfing provides a visual, rule‑based cue that combines price action and volume, making it a useful tool in intermediate‑level technical analysis.</p>