Dark Cloud Cover

The Dark Cloud Cover candlestick pattern occurs at the end of a bullish move in stock price. It is considered to be a bearish reversal pattern.Dark Cloud Cover is a 2 candlestick formation. 

Dark Cloud Cover

The Dark Cloud Cover candlestick pattern occurs at the end of a bullish move in stock price. It is considered to be a bearish reversal pattern.


Dark Cloud Cover Identification

The Dark Cloud Cover candlestick pattern consists of 2 candlesticks. The first candlestick extends the previous uptrend with a long bullish candlestick body.

The 2nd candlestick opens at a new high then closes below the midpoint of the body of the first day with a bearish long body. 

Dark Cloud Cover Candlestick pattern

Interpretation of Dark Cloud Cover

The Dark Cloud Cover candlestick patter formation suggests that short sellers are starting to take control of the market, and longs have been shaken by the sudden loss of bullish momentum. It is common for more short sellers to enter the market with a clear stop threshold at the second day high.  The deeper day-two closes into the first day candlestick body, the greater the probability that the uptrend has topped out. 

Traders typically wait for confirmation if the second day candlestick doesn't trade below the midpoint of the first day body.  Some traders wait for confirmation regardless of how deep the Dark Cloud Cover penetrates the second day.

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