Dark cloud cover

This pattern involves two candles: A large bull candle, and a equal size but higher bear candle. The second candle by being higher creates a cover over the lower one, and because it is black (bear), there its name “Dark cloud cover”.

Figure 5.29: Dark cloud cover

In this pattern, there is a bull trend…at the peak of it, a major attack by the bulls creates a large bull candle. The candle that follows occurs at a larger price (indicating the ongoing dominance by the bulls), but remarkably that second candle finishes being a bear. That suggest that despite a bull trend, and a major bull attack, in that second candle, the bears pulled their muscle and reverse the trend.

Commonly, it follows a decline in prices as the bears emerge victorious.

It is recommended to confirm the trend by waiting to see the third candle.

Figure 5.30: Dark cloud cover