Improve Your Market Timing: The Dark Cloud Cover Pattern
April 16th, 2010 | 
Author: - The Dark Cloud is a two candlestick pattern that is found at the top of a trend is bearish and warns us to “take out the umbrella” because a storm is brewing.
- The Dark Cloud forms with an initial gap up above the prior day’s close and proceeds to trade down and close at least half way into the previous day’s bullish candle.
- The Dark Cloud is a bearish reversal pattern and is enhanced if the move is accomplished with higher volume.
- The Dark Cloud appears to be forming a Bullish Engulfing pattern but does not trade low enough to engulf the prior day’s candle and is not considered quite as bearish as an engulfing pattern.
- The larger the bullish candle and the Dark Cloud candle, the more convincing the pattern becomes.
- The Dark Cloud Cover is the inverse of the Piercing Line pattern.
Posted in Improve Your Market Timing
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