Technical Definition
A three-candle bearish reversal pattern where a Bearish Engulfing pattern is followed by a bearish confirmation candle, representing a forceful transition to seller control.
Buyers lose control abruptly, sellers take over aggressively, and then sellers confirm strength. This pattern is essentially a Bearish Engulfing pattern followed by a bearish confirmation candle.
Buyers lose control abruptly.
Market Psychology
Context
Market in uptrend Buyers are confident Sellers are cautious or sidelined
Continuation
Buyers continue pushing prices higher Bullish sentiment remains intact
Engulfing
Sellers enter aggressively Profit booking and short-selling accelerate Buyers lose control quickly
Confirmation
Sellers return with confidence More supply enters the market Price acceptance occurs at lower levels
Pattern Anatomy
First Candle (Bullish)
Moderate to large bullish real body, confirms buying pressure.
Second Candle (Bearish Engulfing)
Large bearish candle completely engulfing the first candle body, signaling aggressive seller entry.
Third Candle (Bearish Confirmation)
Bearish candle closing below the second candle’s close, confirming sustained seller dominance.
Pattern Rules
Appears after an uptrend
Reversal context is required.
First candle is bullish
Shows ongoing buying.
Second candle is bearish and larger
Power shift.
Second candle engulfs first body
Engulfing structure.
Third candle is bearish
Confirmation flow.
Third candle closes below second candle close
Confirms sustained momentum.
Signal Confirmation
- Strength and size of the third candle
- Price holding below the engulfing candle’s midpoint
- Alignment with resistance zones
- Weakening market structure