Final answer:
The Engulfing bar pattern is formed when two candlesticks have overlapping bodies, with the second candlestick fully encompassing the first, indicating a potential trend reversal in the market.
Step-by-step explanation:
The Engulfing bar, as described in the question, is formed when two candlesticks have overlapping bodies. Specifically, this occurs in a candlestick chart when a larger candlestick fully encompasses the vertical range, including the body and shadows, of the preceding candlestick. There are two types of engulfing bars: a Bullish Engulfing pattern, which occurs at the end of a downtrend and signals a potential reversal to an uptrend; and a Bearish Engulfing pattern, which is seen at the end of an uptrend, indicating a potential reversal to a downtrend. These patterns consist of two candlesticks: the first is smaller and is completely covered or 'engulfed' by the body of the second candlestick.