Dark Cloud Cover Candlestick Pattern
Piercing Line Bullish Candle Setups
A Piercing Line Candle-stick Pattern & Dark Cloud Cover Candle-stick Pattern look alike but the difference is that one occurs at the top of a Trading up trend (Cloud Cover) and the other occurs at the bottom of a downward trend (Piercing).
Upwards Trend Reversal - Dark Cloud Cover Candles
Downwards Trend Reversal - Piercing Line Candles
Piercing Line Candlestick
Piercing line is a long black body followed by a long white body candle.
White body pierces the mid-point of the prior black body.
This is a bullish reversal pattern which occurs at the bottom of a market down ward trend. It shows that the market opens lower & closes above the mid-point of the black body.
This portrays that the momentum of the down-trend is reducing and the price trend is likely to reverse & move in an upward direction.
This pattern is displayed referred to as a piercing line signifying the market is piercing a bottom showing a market floor for the price downward trading trend.
Piercing Line Candlestick
Analysis Piercing Line Candle
A buy signal is confirmed once price closes above neck line which is the opening of the candle on the left of the Piercing Line candle.
This is a bullish setup and price should continue moving upwards & for a trader who puts a buy trade should also place a stop loss order just below the lowest price level.
Dark Cloud Cover Candlestick
Opposite of piercing candlestick.
This candlestick is a long white body followed by a long black body.
The black body pierces the mid-point of previous white body.
This is a bearish reversal pattern setup that forms at the top of an upward trend.
It shows that the market opens higher & closes below the mid-point of the white body.
This portrays that the momentum of the up trend is reducing and the price trend is likely to reverse and move in a downwards direction.
This pattern is shown known as a cloud cover signifying the cloud as a ceiling for the price upwards trend.
Dark Cloud Cover Candlestick
Analysis Dark Cloud Cover Candle
A sell signal is confirmed once price closes below the neckline which is the opening of the candle on the left of this candlestick.
This is a bearish setup and price should continue moving downward and for a trader who puts a sell trade should also put a stoploss order just above highest price level.
Study More Lessons & Tutorials:
- What's Technical Analysis Basis?
- List of SWI20 Trade System
- How to Calculate Pips For UsTec 100 Stock Indices
- Forex Leverage Example 1:100
- SX50 Lot Size Calculation
- Bollinger Band Gold Price Action in Ranging Sideways Gold Markets
- How to Use MT4 Ichimoku Kinko Hyo Trading Indicator
- How is CAC40 Index Traded on the MT4 & MT5 Trading Software?
- NETH 25 Stock Index Trade Strategy Example
- Trailing Stop Loss Gold Order Levels Gold Indicator Analysis
