Bullish Engulfing Candlestick + Support Level = Powerful Confirmation -- with David Moadel
hello and welcome to looking at the markets with David Modell gonna talk
about what if you combine a bullish engulfing candlestick pattern with
support if it happens at a support level this can be powerful it does not work
100% of the time but it does work sometimes and it can be a very
interesting combination to look for before I get started I do offer coaching
for traders and investors if you want personalized coaching you can email me
at David Modell at gmail.com so let's start what they were fresher on what a
bullish engulfing candle is it is a two candlestick pattern so you have a
smaller red candle call it a bearish candle if you want to okay and so let's
take this one it opened here and then it went down and then closed here all right
but then the next candle it gapped down all right a gap lower which so it starts
off bearish but then the buyers push it up and up and up and up and up and then
the close of the green or bullish candle is higher than the open of the red
candle the bearish one all right so it's an engulfing candle because this this
green candle is bigger than this one both on the top and the bottom in other
words this entire candle is contained or included within this entire candle and
we're just looking at the bodies of the candles we're not looking at the wicks
okay just looking at the body of this one in this one so if this body is
contained entirely within this body so the green one is engulfing the red one
and that's a bullish engulfing candle right here okay
so yeah it does start out gapping lower but then the Bulls reject the gap down
and push it all the way up here okay above the top of this one and here's
another way of looking at it all right so again you have a bearish or red
candle opens here closes there then you have a gap down
so the you know that the bottom of this candle is lower than the bottom of the
first candle but then the bull's reject the gap down push the price up up up and
it closes above the top of that first candle alright so that is very bullish
often times again no guarantees this is this does not work 100% of the time but
often times this leads to higher candles or at least sometimes it leads to higher
candles after the bullish engulfing all right so
the next candle might be higher and then higher than higher hopefully all right
now what can make it more powerful what can bring you some even better
confirmation well what if this happens right at a support level that could be
even more powerful sometimes right and so I've got an example I took this off
of tradingview and as you can see here on the Apple
one-minute candlestick chart and by the way this can also happen these this
candlestick Barratt I'm sorry bullish engulfing candlestick pattern it can
happen on any timeframe it doesn't have to be one-minute candles it could be 5
minute or 1 hour or daily candles whatever it is all right so it has
nothing to do with the the timeframe so much as the shapes of the candles all
right so there's a pretty obvious support level here okay
so I drew a line here because it kept coming down to that that same level 1
you know 1 2 3 times and it even stayed there for a while that third time so
that's a pretty strong support level there so that's already you know pretty
good conformation but then look here right what happened
well you had I'll do a close up here of the same chart look at that you have a
smaller red candle and then it gapped down a little bit right and so the
bottom of this candle is below the bottom of that candle and then the the
gap down was rejected by the buyers by the Bulls who pushed the price up
up way above okay so the top of this candles is above the top of that candle
and so it is engulfing the green one is engulfing the red one and we can all see
what happened afterwards all right it was up up and away for sure up and up
and up so it does not always work out this well okay but this was pretty
powerful you have not only a powerful support line with multiple data points
as I like to call them okay one data point here you know another one to
confirm it here and then several here okay to confirm it even more so pretty
strong support and then you needed a catalyst perhaps or a springboard and
here was a two candlestick pattern the bullish engulfing pattern and when that
that engulfing green candle is really big boy that's that's encouraging isn't
it that makes it feel even more powerful and that acted like a springboard here
and that stock just took off all right so that's my quick explanation of how
when you can combine the bullish engulfing candlestick pattern along with
strong support that can be very powerful all right
so I hope this was helpful to you this is something you can look for as I said
on any time frame really and it doesn't have to be stocks
it could be crypto currencies or you know Forex currency pair trading or
whatever it is commodities gold silver oil whatever you like alright and if you
want some more help let's say you want help putting together a trading or
investing plan because you really should have a plan you can contact me for
coaching my email address is David Modell at gmail.com I want to thank you
for watching and listening and I will talk to you again soon