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Bearish Engulfing Marks Resistance


(By Arthur Hill)

The bearish engulfing pattern is a short-term candlestick reversal, but it can also mark future resistance. Jabil Circuit (JBL) formed a bearish engulfing in early May and this area marked resistance a month later. The stock formed a rising wedge that peaked just below the early May high and then gapped down.

Note: This is an educational post featuring a technical analysis technique.