Last Engulfing Bottom

See our Patterns Dictionary for other patterns.

Check our CandleScanner software and start trading candlestick patterns!

Figure 1. Last Engulfing Bottom pattern.

Figure 1. Last Engulfing Bottom pattern.

Forecast: bullish reversal/bearish continuation
Trend prior to the pattern: downtrend
Opposite pattern: Last Engulfing Top
See also: Bearish Engulfing

Construction:

  • First candle
    • a candle in a downtrend
    • white body
  • Second candle
    • black body
    • candle’s body engulfs the prior candle’s body

 

Definition of the Last Engulfing Bottom is exactly the same as of the Bearish Engulfing pattern except the trend requirement. The Bearish Engulfing appears within an uptrend while the Last Engulfing Bottom occurs within a downtrend.

It may be asked why such pattern may reverse a downtrend. Namely, there is a downtrend, but downward momentum somewhat slows down because a small white candle appears. However, the next candle has a long black body, which confirms the bear's strength. Overall most of us intuitively would say that we deal with a bearish continuation pattern.

The Last Engulfing Bottom is a good example to explain that a pattern occurrence is not equivalent to price prediction.

In the case of the Last Engulfing Bottom pattern, its name gives us some hint illustrating how it may work. The pattern should be preceded by a Bearish Engulfing pattern. Then we can expect downtrend reverse if a price is confirmed on the following candles.

If a Last Engulfing Bottom appears alone, that is, it is not preceded by a Bearish Engulfing pattern, a downtrend is likely to be continued. It may be especially true if the following candle closes below the pattern occurrence.

Prediction of trend reversal requires confirmation, i.e. the next candle shall be closed above the pattern.

If volume data is relevant to the analyzed market, it should be considered. If it increases for candles with white bodies, the probability of reversing a downtrend grows.

 

Figure 2.

Figure 2. The chart presents situation that could be called "A Falling Window vs. four bullish reversal patterns".
The Falling Window pattern wins the battle, appearing at a very high trading volume, forming a strong resistance zone.
The Last Engulfing Bottom is a unique pattern because it may behave both, as a bullish reversal and bearish continuation. On the chart, it is visible that the second line of the Last Engulfing Bottom strengthened the mentioned resistance area. Failure of the subsequent bullish reversal patterns helped the bears to retain control.

 

Figure 3.

Figure 3. The Last Engulfing Bottom is among the most intricate patterns because may act as a bearish continuation or a bullish reversal pattern. Confirmation of such pattern occurrence needs to be confirmed on the following candles.
The first occurrence of Last Engulfing Bottom is followed by a White Candle. The market managed to rise although a Falling Window formed a resistance area.
The second appearance of Last Engulfing Bottom resembles the previous one. Initially, the one could think that the pattern is confirmed to be a bullish pattern because a Thrusting appeared. Then however surprisingly a Turn Up pattern emerged which closed the Falling Window.

 

Last Engulfing Bottom statistics

Below you can find some Last Engulfing Bottom pattern statistics calculated by CandleScanner software. To see more detailed statistics, for other markets and periodicity try our CandleScanner software. Prices start at only $10, and you can see more detailed statistics, for other markets and periodicity. Click here to find out more!

Pattern name: Last Engulfing Bottom
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Last Engulfing Bottom): 16,824
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Last Engulfing Bottom): 2.63 %
Average frequency: 132.9
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
17 3,384 4,093 3,104 6,226
% of
Occurrences
0.10 % 20.01 % 24.33 % 18.45 % 37.11 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
29 3,278 3,179 2,519 7,819
% of
Occurrences
0.17 % 19.31 % 18.90 % 14.97 % 46.65 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
SHW 39 129.1 13 33.33 % 28 71.80 %
BEN 46 109.4 25 54.34 % 31 67.38 %
DO 50 99.3 30 60.00 % 32 66.00 %
GILD 40 125.8 25 62.50 % 26 65.00 %
TJX 40 125.9 20 50.00 % 26 65.00 %
STT 50 100.7 27 56.00 % 31 64.00 %
BHI 44 114.4 26 59.09 % 28 63.63 %
HP 49 102.7 29 59.19 % 31 63.27 %
MS 51 98.7 31 60.79 % 32 62.75 %
EXPD 39 129.0 20 51.29 % 24 61.54 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
SNDK 49 100.9 26 53.06 % 26 53.06 %
VRSN 42 104.3 17 40.48 % 17 40.48 %
ETN 43 117.1 17 39.53 % 17 39.53 %
FFIV 46 87.9 18 39.13 % 18 39.13 %
SWKS 41 122.8 16 39.02 % 16 39.02 %
VRTX 42 119.8 16 38.10 % 16 38.10 %
NTAP 45 109.6 17 37.78 % 17 37.78 %
CTXS 41 120.1 15 36.59 % 15 36.59 %
NVDA 52 79.5 19 36.54 % 19 36.54 %
TSCO 42 119.1 15 35.71 % 15 35.71 %
Pattern name: Last Engulfing Bottom
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Last Engulfing Bottom): 4,603
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Last Engulfing Bottom): 2.77 %
Average frequency: 133.4
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
17 568 1,382 998 1,638
% of
Occurrences
0.37 % 11.97 % 30.02 % 21.68 % 35.96 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
29 521 985 792 2,276
% of
Occurrences
0.63 % 10.69 % 21.40 % 17.21 % 50.07 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
APC 10 125.8 6 60.00 % 9 90.00 %
IR 10 125.8 5 50.00 % 9 90.00 %
CCE 12 104.8 9 75.00 % 10 83.34 %
AME 11 114.4 5 45.46 % 9 81.82 %
EXPE 15 83.9 10 66.66 % 12 80.00 %
FOSL 10 125.8 6 60.00 % 8 80.00 %
MS 15 83.9 12 80.00 % 12 80.00 %
MU 10 125.8 8 80.00 % 8 80.00 %
AA 15 83.9 7 53.33 % 11 79.99 %
RF 14 89.9 8 57.14 % 11 78.57 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
ETN 10 125.8 6 60.00 % 6 60.00 %
REGN 11 114.3 5 45.45 % 5 45.45 %
THC 9 139.8 4 44.44 % 4 44.44 %
ALTR 10 125.8 4 40.00 % 4 40.00 %
DAL 10 125.8 4 40.00 % 4 40.00 %
SWKS 10 125.8 4 40.00 % 4 40.00 %
UA 10 125.8 4 40.00 % 4 40.00 %
LUK 14 89.9 5 35.71 % 5 35.71 %
CNX 15 83.9 5 33.33 % 5 33.33 %
WMB 9 139.8 3 33.33 % 3 33.33 %

Comments are closed.