Bullish Engulfing

A bullish engulfing pattern, in Japanese Candlesticks analysis, forms when this happens (courtesy of Investopedia):

It is a pretty powerful reversal pattern and suggests the bulls have taken back control of the stock after a downtrend. Its significance is enhanced when it happens after a prolonged downtrend and on very high volume as is the case here for Goldman Sacks (click to enlarge). The fact that this has occurred on a weekly chart lends it a little more weight. Now leaving the candlestick realm, also note the bullish divergence on the RSI: the stock made a new low this week at around 140.27 (previous low was 157.38 reached the week ending on 8/17/2007) yet the RSI bottomed at 32.72, higher than the 30.54 it reached that summer week. A vigorous rally from here and a test of resistance just below 210 seem likely provided the 140 level is not broken. Granted that's about a 30 point potential gain for a 30 point risk (albeit in a high probability situation) but in this ultrabearish environment, that's as good as it gets (or I should humbly say that's as good as I can find it) on the long side!