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What is a Dark Cloud Cover?The dark cloud cover pattern consist of two candlesticks, first a white and then a black. The two candlesticks should have large real bodies and preferably short or nonexistent shadows. First the black candlestick must open above the previous close (even better is when the candle gaps above the upper shadow, or previous day's high) and closes at least halfway into the real body of day one. A close above the halfway point might still be a reversal but will not be considered a piercing candle and if it drops below the real body of the previous candle, it would be a bearish engulfing.
The pattern should appear after three or more white candles. The lower the close is into the previous candle's body the stronger the signal. Also, if the pattern occurs at some type of resistance with above average volume the signal is very reliable. Leave Dark Cloud Cover and go back to Japanese Candlestick Charts.
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