<p>Bearish Engulfing is a two‑candle reversal pattern in technical analysis that signals a potential shift from upward to downward price momentum. It occurs when a large red (or black) candlestick completely engulfs the body of the preceding smaller green (or white) candlestick, indicating that sellers have overtaken buyers.</p>

<h2>How It Works</h2>
<p>The pattern forms at the end of an uptrend. First candle: a modest green body showing buying pressure. Second candle: opens at or above the prior close, then moves lower to close well below the prior open, creating a red body that covers the entire previous green body.</p>
<p>The engulfing candle reflects a shift in market sentiment: sellers gain control, pushing prices past the prior buying zone. The pattern’s reliability increases when the second candle shows a long real body and little or no upper shadow.</p>
<ul>
<li>Identify a preceding uptrend.</li>
<li>Locate a small green candle.</li>
<li>Observe a larger red candle that opens at or above the green candle’s close and closes below its open.</li>
</ul>

<h2>Why It Matters</h2>
<p>Traders view the Bearish Engulfing as a warning that bullish momentum is weakening and a short‑term downside move may follow. It is often used to set stop‑loss orders, exit long positions, or initiate short trades, especially when confirmed by volume or other indicators.</p>
<p>While powerful, the Bearish Engulfing is not infallible. False signals can appear in choppy or sideways markets, so traders often wait for a close below the pattern’s low or seek confirmation from momentum oscillators before acting.</p>
<p>In practice, combining the Bearish Engulfing with trend analysis and risk‑management rules helps traders turn a visual cue into a disciplined trading decision.</p>