Definition

 

Bearish Dark Cloud Cover consists of two candles and forecasts an upcoming inclining trend. The first day is a long white candle. On the second day, the trading starts above the first day’s closing price (including the shadow). At the end of the day, the share closes near the daily minimum and within the body of the white candle.

  • Trend: Reversal
  • Expected trend: Bearish
  • Previous trend: Bullish
  • Reliability: High
  • Type: Bearish
  • Number: 2

Recognition

  • The market is in a downward trend.
  • The first day is a long white candle.
  • The second day is a black candle which opens above the previous day’s maximum price.
  • The black candle’s closing price is lower than the midline of the previous candle’s body.

Interpretation

The more the black candle covers on the previous candle, the higher the chance for a reversal. Some Japanese technical analysts believe that the black candle should close below the body of the white candle. If it closes above the midline of the white candle, it is recommended to wait for a confirmation. The confirmation could come from a black candle with a downward gap or a lower closing price.

Important factors

The more the black candle covers on the previous candle, the higher the chance for a reversal. Some Japanese technical analysts believe that the black candle should close below the body of the white candle. If it closes above the midline of the white candle, it is recommended to wait for a confirmation. The confirmation could come from a black candle with a downward gap or a lower closing price.