Question

The example shows us clearly how the market changes direction after the formation of a ____________

A) Bullish engulfing bar
B) Doji candlestick
C) Bearish engulfing bar
D) Gravestone Doji

Answer 1

A bearish engulfing bar is a candlestick pattern that indicates a potential change in the market direction from bullish to bearish.

Step-by-step explanation:

The correct answer is C) Bearish engulfing bar.

A bearish engulfing bar is a candlestick pattern that occurs when a small bullish candle is followed by a larger bearish candle that completely engulfs the previous candle. This pattern is often seen as a reversal signal, indicating a potential change in the market direction from bullish to bearish.

For example, if a stock has been in an uptrend and a bearish engulfing bar forms, it suggests that selling pressure has entered the market and the stock may start to decline.