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Nikita (SEBI RA)

17th Nov · SEBI-Registered Analyst

Piercing Pattern vs Dark Cloud Cover

📊 Both are 2-candle reversal patterns but with opposite implications. ✅ Piercing Pattern (Bullish): Appears at bottom of downtrend. First candle = big red. Second candle = big green closing above 50% of first red body. Example: Stock closes ₹300 (red), next day opens ₹295 but closes ₹310 → piercing → bullish reversal. ✅ Dark Cloud Cover (Bearish): Appears at top of uptrend. First candle = big green. Second candle = big red closing below 50% of previous green body. Example: Stock closes ₹420 (green), next day opens ₹425 but closes ₹405 → bearish reversal. 🧠 Rule: Stronger if supported by volume & key support/resistance zones.

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