Outside Reversal

An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session. Outside reversal is also known as either a bullish engulfing (after a downward price move) or a bearish engulfing pattern (after an upward price move) when observed on candlestick charts.