Final answer:
A bearish engulfing bar pattern at the end of an uptrend indicates a potential reversal from a bull to bear market. This pattern, characterized by a larger bearish candle engulfing a smaller bullish candle, suggests the bears are taking control after a period of bullish sentiment.
Step-by-step explanation:
When a bearish engulfing bar pattern occurs at the end of an uptrend, it indicates A) A potential reversal of the current trend. The bearish engulfing pattern is a two-candlestick pattern where the body of the second bar completely engulfs the body of the previous bar and closes below it, which is considered a bearish signal. This pattern is deemed significant when it forms after a sustained uptrend, signaling that bears have overtaken the bulls and that the market could be shifting from a bull market to a bear market.
As an illustrative example, during a bull market, such as when the DJIA broke 4000 in 1995 and reached 12,000 in 2000, investor sentiment is high, and prices are climbing. The market later transitioned to a bearish phase in 1998 when it lost 1200 points, retreating from its highest points value of 9,000. Since 1998, other bear markets have followed, demonstrating the cyclical nature of markets and the significance of reversal patterns like the bearish engulfing bar.