How to identify

1.   An uptrend is under way 2.   The first day is a long white body which is continuing the uptrend 3.   The second day is black body day with an open above the high of the previous day (that's the high not the close) 4.   The second black day closes within and below the midpoint of the previous white body

The Dark Cloud Cover bear is a reversal pattern and the counterpart of the Piercing Line bull pattern. The Dark Cloud Cover bear pattern only occurs in an uptrend. Typical in an uptrend, a long white candlestick is formed. The next day the market gaps higher on the opening however that is all that is remaining to the uptrend. The day after the market drops to close well into the body of the white day, in fact, below its midpoint. Anyone who was bullish would certainly have to rethink their strategy with this type of action. Like the Piercing Line bull a significant reversal of trend has occurred.

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