Bullish engulfing after a decline
Two-bar reversals where today's body fully covers yesterday's down candle, and the decline into it was still printing fresh lows.
By Rohit Singh (Mr. Chartist) · Updated 2026-08-25
An engulfing candle is a one-session change of control: yesterday closed red, today opened at or below that close and finished above yesterday's open. The whole of the previous session's work was undone and then some.
The context clauses matter more than the shape. An engulfing candle in the middle of a range is noise. This scan requires the market to have actually been falling into it — yesterday's close below the close five candles back, and yesterday's low the lowest of that window.
( {cash} ( latest close > latest open and 1 day ago close < 1 day ago open and latest close > 1 day ago open and latest open <= 1 day ago close and abs( latest close - latest open ) > ( latest high - latest low ) * 0.5 and 1 day ago close < 5 days ago close and 1 day ago low <= 1 day ago min( 5 , latest low ) and latest volume > 1 day ago sma( latest volume , 20 ) and latest close > 50 and latest volume > 200000 ) )Chartink can fail silently. Tested on 2026-08-25: a clause containing a nonsense token returned the same number of rows as the correct one, with no error, and a clause with no comparison in it returned every stock in the segment. A scan that returns results has not necessarily parsed as you intended — so sanity-check a few of the names it gives you against the conditions above before trusting the list.
Chartink's own documentation notes that scans cannot always be copy-pasted directly, and its in-app copy function moves condition groups rather than raw text. Treat this clause as the specification to reproduce in the condition builder; if pasting works in your account, so much the better.
What this scan actually tests
- The two-bar colour flip exactly: yesterday closed below its open, today closed above its open.
- Today's real body covers yesterday's: today's open at or below yesterday's close, today's close above yesterday's open. A flat open counts, which is common on NSE.
- Today's body is more than half of today's high-to-low range, dropping dojis and mostly-wick candles that technically engulf.
- 'After a decline' tested two ways on price alone — a net drop over five candles, and fresh lows printing right up to the reversal bar.
What it cannot see
A scan is bar arithmetic. It cannot read a chart, and every recipe here is honest about where the machine stops and your eyes start.
- Location. The scan cannot tell whether the candle sits at a demand zone, a prior swing low, a breakout retest, or in empty air. Chartink has no swing or pivot primitive.
- Depth and maturity of the decline. A shallow three-candle pullback in an uptrend and the fortieth candle of a broken downtrend both satisfy a five-candle net drop.
- Higher-timeframe structure — no weekly trend, no position within the prior range.
- Gap behaviour. A stock that gapped down hard and recovered all day prints the same arithmetic as a clean intraday reversal, and they are very different trades.
Why this setup is worth scanning for
Engulfing is one of the few candlestick signals that is unambiguous as arithmetic — there is no judgement in whether one body covers another. That makes it well suited to a scanner, provided the context clauses do the work the shape cannot.
Moderate hit counts, rising sharply after down days. The volume and price floors keep illiquid names out; everything else is chart work.
Written By
Rohit Singh
Mr. Chartist
With 14+ years of experience in Indian financial markets, Rohit Singh (Mr. Chartist) is a SEBI Registered Research Analyst, Amazon #1 bestselling author, and the founder of Investology — a premium trading ecosystem trusted by a 1.5 Lakh+ strong community across India.
Educational content. A scan is a filter, not a recommendation — the names it returns are candidates for your own analysis, not a buy list, and nothing here is investment advice. Chartink is a third-party service with no affiliation to this site. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance or assure returns. Markets carry risk.