Engulfing bodies

The idea

A bullish body-engulfing pattern has a second real body that covers the previous real body after a decline. Full wick coverage is a different criterion.

Try the scenario

First body: 105 to 101. Next body: 100 to 106.

Check your understanding

Does the second body engulf the first?

• Yes
• No, because all wicks must be covered
• Only if volume doubles

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