Trade Stock Indices

Bullish Stock Index Candle Patterns and Bearish Stock Index Candle-stick Setup Patterns

Bullish Candlestick Patterns Tutorial Course & Bearish Stock Index Candle Patterns Lesson

A Piercing Line Stock Index chart pattern and Dark Cloud Indices chart pattern seem alike, but one shows up when a Stock Index is trending upward (Cloud Cover), and the other shows up when it's trending downward (Piercing).

Upward Stock Index Trend Reversal - Dark Cloud Cover Candles

Downward Indices Trend Reversal - Piercing Line Candles

Piercing Line Candlestick

A Piercing line consists of a long black body followed by a long white body candlestick.

The white body pierces the midpoint of the previous black body.

This setup signals a bullish market reversal at the end of a downtrend. Basically, it means the market opens lower but then closes above the middle of the previous black candle.

This emphasizes that the strength of the downward trend is waning, and the market trend is likely to reverse and ascend in an upward direction.

When you see a piercing line pattern, it signals the market is pushing up from the bottom - basically marking a floor for a downtrend.

Piercing Line Candlestick Setup Tutorial - Piercing Line Candle Pattern

Piercing Line Candle

Analysis Piercing Line Candlestick

A buy signal gets confirmed once the price closes above the neckline, which is the open of the candlestick just left of the Piercing Line candle.

This is a sign that prices will go up, and the price should keep going up: a trader who buys should also put a stop loss just below the area with the lowest price.

Dark Cloud Cover Candlestick

Opposite of piercing candlestick.

This candlestick is a long white body that is followed by a long black body.

The black body pierces the mid point of the prior white body.

This configuration represents a bearish market reversal pattern that materializes at the peak of an upward trend.

It shows that the market opens higher & closes below mid point of the white body.

This shows the uptrend loses power. The market may turn down soon.

This configuration is recognized as a cloud cover, indicating the cloud functions as an upper boundary for price upward trends.

Dark Cloud Cover Candlestick Setup - How Do I Trade Dark Cloud Indices Candle Pattern Bearish or Bullish?

Dark Cloud Candlestick

Analysis Dark Cloud Cover Candlestick

A signal to sell is confirmed when the price closes below the neck-line, which is the start of the candlestick on the left of the candlestick.

This scenario indicates a bearish outlook, suggesting the price is expected to continue descending: consequently, a trader initiating a short position should place a stop-loss order just above the highest price reached.

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