A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or “engulfs” the small white one.
As implied by its name, a bearish engulfing pattern may provide an indication of a future bearish trend. This type of pattern usually accompanies an uptrend in a security, possibly signaling a peak or slowdown in its advancement. However, whenever a trader analyzes any candlestick pattern, it’s important for him or her, before making any decisions, to consider the prices of the days that precede and follow the formation of the pattern.
Lets take a look at few current charts to predict future movement.
Cardiome Pharma Corp. (CRME) is a drug research and development company focused on developing drugs to treat or prevent cardiovascular diseases. Bearish engulfing pattern is formed on this stock today. This makes CRME a short-term short candidate.
Current Price: 9.20
Target Price: 8.80
Packaging Corporation of America (PKG) is a producer of containerboard and corrugated products in the United States. Bearish engulfing pattern is formed on this stock today. This makes CRME a short-term short candidate.
Current Price: 25.32
Target Price: 24.00