Outside Reversal

"Whoaaaa...check out that stock’s candlesticks; it just did a sick outside reversal, dude."

Here’s the inside scoop on the outside reversal: it’s when a security has a higher high than yesterday, and a lower low than yesterday. Like most candlestick chart signals, the outside reversal is one of many signals you can combine to do some technical trend analysis.
There are two main types of outside reversals: bullish and bearish.

The bullish outside reversal (bullish engulfing) is when the price of the security went from bearish to bullish. The bulls engulfed the bears, jumping from a really low low to a really high high.

The bearish outside reversal (bearish engulfing) is when the bears engulf the bulls. The bulls were roaring the security’s price upward, until the bears cornered the bulls, bringing that price from a really high high to a really low low.

Outside reversals aren’t common, since they work with extremes: both a more extreme high and low price than yesterday. But since they aren’t common, and they are dramatic, they definitely catch the eye of traders looking to bank on price reversals.