Bearish engulfing patterns signify that a bear market (a downward trend) may be about to engulf the market, which is simple enough, right? Describing the pattern itself is a bit harder. Analysts look at charts to spot trends and patterns.
A "candlestick" is a type of chart that shows the low, high, open and close price of a share for a specific period. For this example, we're looking at the period of one day. The bearish engulfing pattern is a small white candlestick, followed by a much larger black one. The white one means the security had a higher close price price than open. The black one, though, closed with a lower price than it opened at. This low close price may indicate that the share lost momentum during the measured period.
For example, if you're looking at the candlestick chart, and you notice the share closed low, it might not be a huge issue if it's just a day, or if it's a small loss during the day. But if it happens a few times, that black candlestick can become a black cloud over your investment future.
Related or Semi-related Video
Finance: What is a Bearer Bond, or Beare...20 Views
Finance a la shmoop... what is a bearer bond or bearer stock alright you know
that saying possession is nine-tenths of the law
right well that's how bearer bonds and stocks work if you have the paper [Man presenting a bond]
representing the bond or stock aka the bond or stock certificate itself in your
hot little hands or wallet well then you own the bond or stock whether you stole
it or bought it or you know 3D printed it...In bearer bonds and
stocks there's no record or tracing of who bought or owned the bond or stock
sort of the opposite of how Bitcoin works and because of this non tracing [Money in a laundry machine]
and the ease with which money could be laundered for our kindly loving
terrorist friends bearer bonds and stocks are not very common today because
investors simply don't like the idea that their precious assets can be stolen [Thief running from police with money]
and then used to you know match plaid with stripes to counter this anonymity
most securities are in fact registered meaning that ownership is filed
officially with a brokerage or an issuer ie the company itself so that money can [A tracker appears]
be tracked and well taxed all over the world and note that one way bearer bonds
or stocks are dealt with in the fashion realm is to you know simply get rid of
the E don't look....[Man walking on a catwalk with no clothes]
Up Next
What is the maturity of a bond? Maturity refers to the time when an investment ends. When maturity happens, the investor is either on the hook for...