Technical Analysis · Bearish Reversal
Dark Cloud Cover
Dark Cloud Cover is a two-candle bearish reversal pattern where a bullish candle is followed by a bearish candle that opens above the prior high and closes below the midpoint of the prior candle's body.
Bullish candle
Bearish candle
Highlighted = the pattern itself
Category
Bearish Reversal
Signal
Sell
Reliability
★★★★★
Candles Involved
2
What does it signal?
A sharp intraday reversal shows sellers overwhelming an opening rally, erasing the majority of the prior session's gains.
How to identify a Dark Cloud Cover
- Forms after an uptrend.
- First candle is a long bullish candle.
- Second candle opens with a gap up, then sells off to close more than halfway into the first candle's body — without fully engulfing it.
How to trade a Dark Cloud Cover
- The deeper the close cuts into the first candle's body, the stronger the signal.
- Stop-loss is typically placed above the high of the second candle.
Educational only — not financial advice. Combine any candlestick pattern with broader market context, risk management, and your own trading plan.
FAQ
Common questions
Dark Cloud Cover's second candle closes below the midpoint of the first candle's body but not below its open, whereas Bearish Engulfing fully closes below the first candle's open.
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