On Friday, Mar 25, 2022, NIFTY 50 Index (NIFTY) Index price formed the following Dark Cloud Cover Candlestick chart pattern on the price chart:
- The Dark Cloud Cover is a very special kind of strong reversal pattern.
- When formed on an uptrending move, it signals a very strong indication for reversal of prices
- That is, its formation leads to decline in stock prices in future
- The first candle is a green-colored, non-doji long bullish candle.
- The second candle is a red-colored, bearish, non-doji candle
- The close of the second candle is located somewhere between the first candle’s lower half body.
- The open price of the second candle can be above or equal of the prior high.
- A clear indication that a strong reversal may be coming soon, dark cloud is seen as a positive development.
- Most of the active traders usually wait for the next confirmation candle to form before getting into the trade on a dark-cloud-cover-based candlestick pattern.