Dark Cloud Cover
A two-candle formation in which a falling candle opens above the prior rising candle's close and closes below its midpoint.
How it is identified
Test: previous candle rises; current Open > previous High; current Close < midpoint of previous body but above its Open
Unit
qualitative
In depth
The formation is a partial bearish engulfing: the second candle reverses more than half but not all of the first, which is what distinguishes the two. The midpoint condition is what gives the term content, and the opening-above-the-prior-high condition means it requires a gap, which is common in India after overnight news. It is the mirror of the piercing pattern. Defined here; no directional inference is offered.
Worked example
Candle 1 rises from ₹494 to ₹528, midpoint ₹511. Candle 2 opens at ₹532, above the prior high, and closes at ₹506 — below the ₹511 midpoint and above the ₹494 open, so it qualifies.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Dark Cloud Cover” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.