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Dark Cloud Cover

Dark cloud cover is a bearish reversal candlestick pattern. They occur at the top of an up trend.

(Don't look for silver lining)

Formation
This formation consists of two candles. The first one is a white candle, which signifies the ongoing uptrend. On the next day, though the stock strongly opens above the high of the previous day, the supply tremendously increases to pull down the price to a lower level. The second day closes well with in the body of the first candle.

Importance
It is obvious that the sellers took over the control of the market. Lower the level of the close of the second candle, more is the chances of a top reversal.

Similar pattern may occur along an uptrend without a reversal. It only exhibits a minor profit booking.

dark cloud cover




Counter part of this pattern is bullish reversal pattern called Piercing Pattern.






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