Bearish Candlestick Scans: Engulfing, Harami, Evening Star and More

Each candle on a daily chart is one session. Its body spans the open and the close, and the wicks above and below reach the high and the low. A down candle is one that closed below its open; an up candle closed above it.

A bearish candlestick pattern is a named sequence of two to four of those sessions, usually ending in a down candle that undoes some or all of what came before it. The names are old and the definitions are precise, which is exactly what makes them scannable - a computer can check the arithmetic on the whole market in a way a person flipping through charts cannot. What the label does not do is forecast. It records a shape that has already happened.

The page works through the NSE cash market on daily bars. For every stock it looks at the short run of sessions ending on the date you have selected and checks whether any of the five formations completes on that last bar. That word matters: a shape only appears on the day it finished, so to see the formations from an earlier session you move the date picker back to it.

Engulfing, harami, evening star and three black crows come from the technicalindicators library, which is the same detection code used by the Unfluke scanner and backtester. The three-line strike is written directly from its standard four-candle definition, because the library does not cover it.

The controls above the table are the session date picker and Reset, a Universe dropdown offering All, Nifty 50, Nifty Next 50, Nifty Bank and F&O, and Export CSV for taking the current list away.

Four of the five are the mirror images of the bullish shapes; the fifth is a pattern that resists being filed on either side.

Bearish Engulfing

Two candles. An up candle, followed by a down candle that opens above the previous close and closes below the previous open, so its body covers the whole body before it. The second session gives back everything the first one gained, and then some.

Bearish Harami

A large up candle, then a small down candle whose body fits inside it. The range of the second session is contained by the first - the opposite geometry to engulfing, and a picture of a market that has stopped expanding rather than one that has reversed.

Evening Star

Three candles: a long up candle, a candle with a small body of either colour, and then a down candle that closes well down into the body of the first. It is the morning star turned upside down, and the small middle candle is again the defining part.

Three Black Crows

Three consecutive down candles, each closing lower than the last, and each opening inside the body of the candle before it. The opening rule is what distinguishes a steady three-session decline from three separate gaps down.

Three-Line Strike

Four candles, and the one on this page whose reputation is unsettled. Three down candles come first, each opening within the previous body and closing beyond the previous close. The fourth is an up candle whose body engulfs all three: it opens below the third close and closes above the first candle's open, reversing the run in one session.

The textbooks file it as a continuation pattern, but its actual behaviour is disputed. Thomas Bulkowski's testing found this bearish variant acting as a bullish reversal much more often than as a continuation - the reverse of the traditional reading. It is a rare shape and worth looking at, but it is not a reliable signal in either direction, and this guide is not going to pretend otherwise.

The tabs are All, Bearish-Engulfing, Bearish-Harami, Evening-Star, 3-Line-Strike and 3-Black-Crows. The columns:

• Symbol - the NSE trading symbol.
• LTP - the session's close, with the change and percentage change against the previous close.
• Candles (5D) - the last five daily candles as a miniature candlestick chart, so you can see the formation itself rather than only its name.
• Price Movement - a line through the last 15 closes, giving the fortnight of context around the shape.
• Pattern - which formation or formations the scan found. One stock can carry several at once, since the definitions overlap at their edges.

The longest shape here is four sessions. Everything that gives a chart its meaning over a longer horizon is outside that window: the direction of the trend the stock is in, the levels it has been turning at for months, what its sector and the index were doing on the same days, and whether a result, a block deal or a news event accounts for the whole thing.

Thin trading distorts the shapes badly. In a stock that changes hands rarely, a wide body is a handful of orders rather than a crowd changing its mind, and the pattern is an accident of the order book. Filtering by Universe, or checking turnover elsewhere in the terminal, keeps that out of a shortlist.

A completed formation can also fail immediately and often does. The definition constrains the bars that have already printed and says nothing about the next one. Reading the page as a catalogue of things that happened, rather than a list of things about to happen, is the difference between using it well and misusing it.

The scan replaces the search, not the judgement. Some ways researchers put a list like this to work:

• Look at Candles (5D) before anything else, and only then at the name. A shape that satisfies a rule by a rupee looks very different from one that satisfies it comfortably.
• Note whether the formation sits at the end of a long run or in the middle of a drift; Price Movement answers that in one glance.
• Count how crowded a tab is. A day on which hundreds of stocks print the same bearish shape is usually describing the whole market rather than any one company.
• Export a few weeks of lists and check what actually followed, in this market, on your own data. That is a slow exercise, and it is worth more than any published success rate.

These are ideas to study, paper-trade and backtest, not recommendations or signals, and not a promise of any result. A completed shape says nothing certain about the next session, and many fail at once. Size, entries, exits and risk are your own decisions.

1. The pattern after a run

• Setup: a Bearish Engulfing or Evening Star whose Price Movement line shows it came after a strong rise, near a level the stock has turned at before (an R1 or R2 on Pivots, or an old high).
• Entry idea: for short-side research, a move below the pattern's low in the next session; for holders, a reason to tighten a stop.
• Invalidation: a close above the pattern's high.

2. Three Black Crows in a downtrend

• Setup: Three Black Crows in a stock already below its falling averages.
• Reading: steady selling in the trend's direction; many traders avoid new long positions while it lasts.

3. Treat the three-line strike with care

• Setup: a 3-Line-Strike on this page: three down candles then one up candle that engulfs them.
• Reading: its behaviour is disputed, and testing has often found it acting as a bullish reversal; study it on your own data before giving it any meaning.

4. Read a crowded tab as the market

• Setup: hundreds of stocks printing the same bearish shape on one day.
• Reading: it describes a market-wide fall more than any one company; the index level matters more than the single stock.

How to test these

Step back through past sessions, record each formation's high and low, and check how often the next session broke the low before the high. Compare the three-line strike's results with the others.

The other side of the page is covered in the bullish candlestick scans guide. For formations that take weeks to build, read the chart patterns scanner guide. For unrelated readings of the same session, see RSI scans, Supertrend scans and pivot points and CPR explained. The Watch List guide covers the rest of the section. Sign up free to open the scan.