Dark Cloud CoverBack to Glossary
In technical analysis, Dark Cloud Cover is a candlestick pattern that indicates a momentum shift from bullish to bearish in an asset’s price. Dark Cloud Cover patterns are composed of three candles that go as follows: They initially start off as bullish, with a large up candle indicating a significant amount of buying. The following candle gaps-up, taking the price even higher, but then sellers bring the price back down, causing this second candle to drop further than the half-way point of the previous one. Finally, the third candle, also known as the confirmation candle, sees the price falling below the level of the second one.
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