Understanding Candlesticks_7. Dark Cloud Cover Pattern

Lesson 7: Dark Cloud Cover Pattern

Dark cloud cover is a two candlestick bearish reversal pattern. In the first
candle there forms a long bull pattern; the other is a long bear candle that closes
below the middle point of the first candle.

Here is how a dark cloud cover forms: the first session passes in total bull
control and just as the session is about to end, the price reaches close to its high.
The next session is the exact opposite - as the bears take charge, pushing the prices
down to below the first candlestick’s minimum point.

The signal will get even stronger if the bears manage to push the price lower. As
with the bullish piercing pattern, both of the candlesticks need to have long real
bodies.

As we want to see a complete change in the current market sentiment regarding
this bearish reversal signal, we will be on the look-out for an up-trend. This appears
to be a dark cloud cover as if it has formed after a strong move upwards. But, this is
not a dark cloud cover, because it has formed during a down-trend.