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.
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About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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