Dark Cloud Cover Bearish
Pattern: Reversal
Trend: Bearish
Reliability: High
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How to
Identify it
- First day is a long
white day
- Second day is black
with an open above the high of the previous day
- Second day closes
within but below the midpoint of the first day’s body
What it
Means
In an uptrend the market
gaps open, but loses ground to fall below the midpoint of
the previous day. The Dark Cloud Cover pattern suggests an
opportunity for the shorts to capitalize on the next day’s
open: a warning sign to bullish investors. The Dark Cloud
Cover pattern is the opposite of the Piercing line pattern.
