An engulfing pattern is primarily considered a reversal pattern, not a continuation pattern. Its core purpose in technical analysis is to signal a potential shift in market control from buyers to ...

The pattern is composed of four price swings (legs) and five pivot points labeled X, A, B, C, and D. It can appear in two forms: Bullish (looks like an "M") and Bearish (looks like a "W"). XA Leg: The ...