Piercing Line Candlestick and Dark Cloud Cover Candlestick
Piercing Line Candle & a Dark Cloud Cover Candle both look alike but the difference is that one occurs at the top of a Gold price uptrend (Cloud Cover) and the other occurs at the bottom of a downward XAUUSD price trend (Piercing Line).
Upward Trend Reversal - Dark Cloud Cover CandlesticksDownward Trend Reversal - Piercing Line Candlesticks
Piercing Line Candlestick
Piercing line candlestick is a long black body followed by a long white body candlestick.
The white body pierces the mid-point of the previous black body.
This piercing line candle pattern is a bullish reversal pattern that occurs at the bottom of a market downtrend. It shows that the market opens lower and closes above the midpoint of the black body candlestick.
This pattern shows that the momentum of the downtrend is reducing and the current market trend is likely to reverse and move in an upward direction.
This piercing line candle pattern is shown as a piercing line signifying the market is piercing the bottom therefore representing a market floor for the XAUUSD price downward trend.
Piercing Line Candle Pattern
Technical Analysis Piercing Line Candlestick
A buy signal generated using the piercing line candlestick pattern is confirmed once price closes above the neckline which is the opening of the candlestick on the left of the Piercing Line candlestick as shown on example above.
This is a bullish setup and Gold price should continue moving upwards and for a trader who puts a buy trade using this setup should put a stop loss just below the lowest price level.
Dark Cloud Cover Candlestick
Dark cloud cover candle is the opposite of piercing line candlestick - this pattern occurs at the top of an uptrend.
Dark cloud cover candle is a long white body followed by a long black body.
The black body pierces the midpoint of the prior white body.
Dark cloud cover candlestick is a bearish reversal pattern that occurs at the top of an uptrend.
It shows that the market opens higher & closes below the midpoint of the white body.
Dark cloud cover candlestick pattern shows that the momentum of the uptrend is reducing and the market trend is likely to reverse and move in a downward direction.
This candlestick pattern is shown known as a cloud cover signifying the cloud as a ceiling for the Gold price upwards trend.
Dark Cloud Cover Candlestick Pattern
Technical Analysis Dark Cloud Cover Candlestick
A sell signal generated using this candlestick pattern is confirmed once price closes below the neckline which is the opening of the candle on the left of this candlestick as illustrated above.
This is a bearish setup and Gold price should continue moving downwards & for a trader who puts a sell trade they should place a stop loss just above the highest price level.
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