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Short side scan · tested as a short trade

Bearish Engulfing Screener

This scan finds stocks where today's red candle body fully covers yesterday's green candle body, while the price is within 5% of its 52-week high. Chalni tests it as a short trade.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: bearish engulfing and within 5% of 52 week high

  1. Bearish engulfing
  2. Close > 0.95× 52-wk high

Find US stocks where today shows a bearish engulfing candle; and the closing price is above 0.95 times the 52-week high (before today).

Formula view
# tested as a short trade (profit when price falls)
pattern(seng)
AND close > 0.95 * highest(high, 252, before_today)
Example chart: Bearish engulfing near the highDaily candles of a made-up sample stock with 5% below the 52-week high (before today). The shaded day is the day the scan fired.
  • 5% below the 52-week high (before today)
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

A bearish engulfing pattern is the mirror of the bullish one. Buyers were in control yesterday; today sellers opened at or above yesterday's close and drove the price below yesterday's open.

Near a 52-week high, this can mark exhaustion: late buyers are trapped and early buyers take profits. But in strong uptrends many of these patterns are only pauses.

How traders use it

  • Holders can tighten their stops after a bearish engulfing at a high.
  • Short sellers often want confirmation: the next day trading below the low of the pattern.
  • High volume on the engulfing day makes the signal stronger.

Watch out for

  • Strong leaders often shake off bearish candles and keep rising.
  • Shorting near the highs in a bull market is a low-odds trade.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

What is a bearish engulfing pattern?

A two-candle pattern where a big red body completely covers the previous green body, which suggests sellers have taken control.

Is a bearish engulfing pattern reliable?

It means more after a strong run and at resistance, and less in strong uptrends. Test it before you use it.

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