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Nikita (SEBI RA)

13th Nov Β· SEBI-Registered Analyst

Volume + Engulfing Candle – Power Shift Confirmation πŸ’ͺπŸ“ˆ

πŸ“Š An Engulfing Candle with rising volume is one of the most reliable signs of trend reversal or continuation, depending on its position in the trend. βœ… Formation: Big bullish or bearish candle fully engulfs the previous one. Volume 1.5–3Γ— higher than average. Appears after a trend phase or consolidation. βœ… Meaning: Indicates a power shift between buyers and sellers; volume validates strength. πŸ“Œ Example: Stock falls β‚Ή920 β†’ β‚Ή870, forms bullish engulfing on 2.2Γ— volume β†’ reversal signal β†’ short-covering and fresh buying confirmed. 🧠 Tip: Use engulfing patterns only when volume confirms; low-volume engulfing = weak signal.

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