Multi-Candle Patterns
Engulfing, harami, stars, three soldiers.
Bullish engulfing at the end of a decline Engulfs the whole prior body rgba(47,171,125,0.10) An engulfing candle opens beyond the previous close and finishes beyond the previous open, swallowing the prior body whole. It says the side that was in control has been overwhelmed within a single period. Bullish engulfing A large green body engulfs the prior red one, at the end of a decline. Buyers took the whole period back. Bearish engulfing A large red body engulfs the prior green one, at the end of a rise. Sellers took it back. Harami The opposite shape: a small body sits inside the previous large one. Momentum has stalled, not reversed. Morning star Three candles: a long fall, a small indecisive body, then a strong rise. A bottom forming over three periods. Evening star The mirror image at a top. Three white soldiers Three long green candles in a row, each closing higher. Sustained buying. These are descriptions of what happened, not predictions of what follows. They tell you the balance of power shifted during those candles. Whether it stays shifted is a separate question, and the honest answer is that it often does not.
Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Charts.