Engulfing pattern
An engulfing pattern is made of two candles: the second, of the opposite colour, has a body that completely covers the body of the first.
A bullish engulfing appears after a decline: a small red candle is followed by a large green candle whose body fully covers the previous one. A bearish engulfing is the opposite, after a rally.
It shows a shift in the balance of power within a single period: whoever was in control suddenly loses all the ground gained. The bigger the second body compared with the first, the clearer the signal.
As with every candlestick pattern, location makes the difference. An engulfing at major support or after a false breakdown is worth far more than one in the middle of nowhere.
See also