In the Candlestick chart, when a fall engulfs the previous three candles, it is usually seen as a potential bearish signal, indicating that the market may experience a decline or adjustment.
This pattern is also known as "One Black Engulfs Three Whites," which refers to a candlestick with a body that completely covers the bodies of the previous three bullish candlesticks. It indicates that the upward momentum in the market may be weakening, and sellers are beginning to dominate the market.
However, "one bearish candle engulfs three bullish candles" is not an absolute reversal signal and needs to be combined with other indicators and market conditions for a comprehensive judgment. For example, if this pattern occurs with a significant increase in trading volume, it indicates that more funds are flowing out of the market, which further confirms the possibility of a market reversal. In addition, it is also necessary to consider the position of the stock price; if it appears at a high level, the possibility of a reversal is greater; if it appears at a low level, it may indicate that the main force is washing out.
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In the Candlestick chart, when a fall engulfs the previous three candles, it is usually seen as a potential bearish signal, indicating that the market may experience a decline or adjustment.
This pattern is also known as "One Black Engulfs Three Whites," which refers to a candlestick with a body that completely covers the bodies of the previous three bullish candlesticks. It indicates that the upward momentum in the market may be weakening, and sellers are beginning to dominate the market.
However, "one bearish candle engulfs three bullish candles" is not an absolute reversal signal and needs to be combined with other indicators and market conditions for a comprehensive judgment. For example, if this pattern occurs with a significant increase in trading volume, it indicates that more funds are flowing out of the market, which further confirms the possibility of a market reversal. In addition, it is also necessary to consider the position of the stock price; if it appears at a high level, the possibility of a reversal is greater; if it appears at a low level, it may indicate that the main force is washing out.