I should have titled this "counting your chickens before they're hatched". Anyway, a few words on bullish engulfing candles, the term of which is being bandied about a great deal today. But don't count your chickens. Just because price took out a high and a low, does NOT a bullish engulfing make. It's also unwise to call something a engulfing or any other pattern when the trading day is not yet over. As explained by stockcharts.com
The bullish engulfing pattern consists of two candlesticks, the first black and the second white. The size of the black candlestick is not that important, but it should not be a Djoi which would be relatively easy to engulf. The second should be a long white candlestick – the bigger it is, the more bullish. The white body must totally engulf the body of the first black candlestick. Ideally, though not necessarily, the white body would engulf the shadows as well. Although shadows are permitted, they are usually small or nonexistent on both candlesticks.
After a decline, the second white candlestick begins to form when selling pressure causes the security to open below the previous close. Buyers step in after the open and push prices above the previous open for a strong finish and potential short-term reversal. Generally, the larger the white candlestick and the greater the engulfing, the more bullish the reversal. Further strength is required to provide bullish confirmation of this reversal pattern.
We are seeing some short covering today in crude oil ahead of tomorrow's inventory report. I myself am taking partials in various short positions and checking my cover stop alerts but do not go all in on a bullish engulfing when the day is not over. Even if the candle engulfs the prior days body by the close, these candles still require confirmation tomorrow. Has the macro environment changed in any way? Even if markets confirm tomorrow, this could all just be a back fill opportunity to add to shorts at a higher level. Be patient. If you buy, buy calls and limit your risk. I don't hear any fat lady singing yet.