# Piercing Pattern and Dark Cloud Cover

> The piercing pattern and dark cloud cover are two candle reversals where the second closes past the first candle's midpoint. Learn the rules and how to trade them.

Source: https://learn.tradelabsai.com/candlesticks/piercing-pattern/  
Track: Candlesticks · Level: Beginner · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Piercing Pattern and Dark Cloud Cover", https://learn.tradelabsai.com/candlesticks/piercing-pattern/

The piercing pattern and dark cloud cover are two candle reversal patterns closely related to engulfing patterns. In each, the second candle moves strongly against the first and closes more than halfway into its body, but not beyond it. The **piercing pattern** is bullish and forms after a decline. **Dark cloud cover** is bearish and forms after a rise.

## The rules

*Figure: The second candle closes beyond the midpoint of the first candle's body.*

| Rule | Piercing pattern | Dark cloud cover |
|---|---|---|
| Prior move | Decline | Rise |
| First candle | Long red | Long green |
| Second candle open | Below the first candle's low or close | Above the first candle's high or close |
| Second candle close | Above the midpoint of the first body, below its open | Below the midpoint of the first body, above its open |

If the second candle closes beyond the first candle's open, the pattern becomes an engulfing pattern instead. See [Engulfing Patterns](https://learn.tradelabsai.com/candlesticks/engulfing-patterns/).

## What the patterns show

In a piercing pattern, the market opens lower, extending the decline, which encourages sellers. Then buyers push back so strongly that the candle closes more than halfway up the previous red candle. The sellers who sold the lower open are now losing, and the failure of the gap down suggests demand is returning. Dark cloud cover tells the same story in reverse.

**Example: Dark cloud cover at a high**
An index ETF rallies for a week to a previous high near $512. Day one: a long green candle from $504 to $511. Day two: opens at $513, above the prior high, but sellers take over and it closes at $506.80, below the midpoint of day one's body ($507.50). The failure above the old high plus a deep close into the prior candle is a bearish signal. A trader waits for day three to close below $506.80 before shorting, with a stop above $513.

## Gaps in modern markets

The classic definitions assume the second candle opens with a gap beyond the first candle's close. Daily stock charts still gap regularly, but in 24 hour markets like forex and crypto, gaps between candles are rare. Traders there focus on the depth of the second candle's close into the first body and use the pattern more loosely.

## Strength factors

- The deeper the second candle closes into the first body, the stronger the signal.
- Location at support (piercing) or resistance (dark cloud cover).
- Higher volume on the second candle.
- Alignment with the higher timeframe trend, for example a piercing pattern at the end of a pullback in an uptrend.

## Trading the patterns

1. **Wait for the second candle to close** past the midpoint.
2. **Confirmation:** many traders wait for a third candle to move further in the new direction.
3. **Stop:** below the pattern's low (piercing) or above its high (dark cloud cover).
4. **Target:** the next resistance or support, with a reward at least larger than the risk.

## Common mistakes

- **Accepting second candles that close just shy of the midpoint;** the depth is the signal.
- **Trading them against strong trends** without other evidence.
- **Confusing them with engulfing patterns** and expecting the same strength.

## Frequently asked questions

### What is a piercing pattern?

A bullish two candle reversal after a decline: a long red candle followed by a green candle that opens lower and closes above the midpoint of the red candle's body.

### What is dark cloud cover?

The bearish counterpart after a rise: a long green candle followed by a red candle that opens higher and closes below the midpoint of the green body.

### Is a piercing pattern as strong as an engulfing pattern?

Generally slightly weaker, because the second candle does not fully reverse the first. Location and confirmation make a big difference.

Next, learn the inside candle pattern: the [Harami](https://learn.tradelabsai.com/candlesticks/harami/).

## Continue learning

- Next lesson: [Harami](https://learn.tradelabsai.com/candlesticks/harami/)
- Previous lesson: [Three White Soldiers and Three Black Crows](https://learn.tradelabsai.com/candlesticks/three-white-soldiers/)
- Related: [Three White Soldiers and Three Black Crows](https://learn.tradelabsai.com/candlesticks/three-white-soldiers/): Three white soldiers are three strong rising candles; three black crows are three strong falling ones. Learn the rules, context and signs of exhaustion.
- Related: [Engulfing Patterns](https://learn.tradelabsai.com/candlesticks/engulfing-patterns/): An engulfing pattern is a two candle reversal where the second body fully covers the first. Learn bullish and bearish engulfing rules, context and trade setups.
- Related: [Harami](https://learn.tradelabsai.com/candlesticks/harami/): A harami is a small candle contained inside the previous candle's body, signalling a pause. Learn bullish and bearish harami, the harami cross and how to trade them.
- Related: [Morning Star and Evening Star](https://learn.tradelabsai.com/candlesticks/morning-star-and-evening-star/): The morning star and evening star are three candle reversal patterns. Learn their structure, what each candle shows, how to confirm them and how to trade them.
- Related: [Support and Resistance](https://learn.tradelabsai.com/price-action/support-and-resistance/): Support is where buying tends to stop a fall; resistance is where selling tends to stop a rise. Learn to draw levels, judge their strength and trade them well.
- Related: [How to Read Candlesticks](https://learn.tradelabsai.com/candlesticks/how-to-read-candlesticks/): Learn to read candlestick charts: open, high, low and close, bodies and wicks, timeframes, and what a candle tells you about buyers and sellers.