Dark Cloud Cover Pattern

Dark cloud cover is a bearish reversal pattern that appears in the uptrend. It is a two candle pattern.

Dark Cloud cover is a two-candle pattern that appears in uptrend. The first candle is a strong body bullish candlestick pattern. The next candle opens higher but closes below the mid-point of the earlier candle body and becomes the bearish candlestick body.

It is a bearish pattern that warns us about the possibility of the reversal. It indicates that the uptrend is in danger and it is weakening.

This pattern needs more confirmation, it tells us that the bulls needs to be more careful.

The scenario would be bearish if price sustains below the low of the second candle of the Dark cloud cover pattern. If price goes above the high of the first candle of the Dark cloud cover, it negates the pattern and becomes a bullish event.

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This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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