Dark Cloud Cover Candlestick Pattern

 What is a Dark Cloud Cover Candlestick Pattern?

Dark Cloud Cover is a bearish reversal candlestick pattern that is developed at the end of an uptrend. It is composed of two candlesticks. The first candlestick is a bullish candlestick and the second one is a bearish candlestick. 

You can find this Dark Cloud Cover candlestick pattern significant as it signals the reversal of an uptrend into a downtrend. If the volume is high when the formation of this candle, there will be more chance of the reversal to take place as shown in the image below.


If the prices increase, the pattern becomes more significant for the reversal to the downside. If the price action is odd then the pattern is less significant as the price remains irregular after this pattern.


How to use Dark Cloud Cover Candlestick Pattern?

You must look at a few points before trading with the dark cloud cover pattern

  • The trend should be an uptrend, as the dark cloud cover pattern is a bearish reversal pattern.
  • The length of the candlestick performs a vital role in deciding the efficiency with which the reversal will take place.
  • The gap up between the bullish and bearish candlesticks indicates how powerful the trend reversal will be.
  • The bearish candlestick should close more than the midpoint of the previous bullish candlestick.
  • Both the bullish and the bearish candlestick pattern should have larger bodies with a small shadow.

Importance of Dark Cloud Cover in Trading


The traders find this pattern important as it signals the reversal of uptrend into a downtrend. One should look at the daily charts for this pattern as this pattern is less important in the lesser time-frame charts.




This pattern happens near the resistance level. If the volume is high during the formation of this candle, there are more chances of the reversal to take place.

Don’t forget to confirm the signals given by this pattern with other technical indicators. You can also use technical indicators to filter out the stocks for trading the stocks.
Location: India

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