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Glossary · Candlestick patterns

Dark cloud cover

A two-candle bearish reversal pattern: a long bullish candle, then a bearish candle opening higher and closing below the first body's midpoint.

By Sky Trade editorial teamUpdated

Dark cloud cover is the bearish counterpart of the piercing line. After a rise, a long bullish candle is followed by a bearish one that opens above the first candle's close — classically on a gap — then falls to close below the midpoint of the first body without going below its open. A close below the open would make it a bearish engulfing.

The image is a dark cloud drifting over a sunny day: the second candle starts optimistically and ends by erasing more than half of the previous gain.

On continuous forex charts the gap rarely exists, so traders usually accept a version in which the second candle simply closes deep into the first body. That makes the pattern more frequent and each instance less meaningful, which is a reason to insist on context:

  • a clear prior uptrend;
  • resistance or a round number at the high;
  • confirmation by the next candle closing lower.

A dark cloud cover in the middle of a range, or against a strong higher-timeframe trend, is often followed by nothing at all. See piercing line and dark cloud cover.

Example

USD/CAD on M15: a bullish candle from 1.3600 to 1.3640 (midpoint 1.3620), then a bearish candle from 1.3642 to 1.3615. Closing below the midpoint but above 1.3600 makes it a dark cloud cover.

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