The bullish engulfing pattern has formed today on stock futures. An engulfing pattern occurs when a series of bearish candles is followed and entirely encompassed (engulfed) by the body of a single bullish maribozu candle, as shown in this chart. The greater the number of prior candles that are encompassed by the bullish engulfing pattern, the more powerful the move is expected to be. Today's pattern engulfs the previous five days' downward momentum. We would therefore expect this to be a very powerful bullish pattern. Japanese candlestick patterns have tendency to be very short-term in nature, however, so I never trade based solely upon them alone.There were several other bullish news events today. However, I haven't the time to write about them.
