PIERCING LINE vs. DARK CLOUD COVER

Both Piercing Line & Dark Cloud Cover are 2-day reversal patterns.
Whether a pattern is bearish or bullish reversal, it depends upon whether it appears at the end of a downtrend (Piercing Line) or an uptrend (Dark Cloud Cover).



PIERCING LINE (BULLISH)
Piercing Line is a bottom reversal pattern / bullish reversal pattern.
It could be formed at the end of a downtrend, or during a pullback within an uptrend, or at the support.

This is a 2-candle pattern which can signal a possible turning point:
The 1st day is long black/red candle.
The 2nd day is a long white body candle that opens sharply lower, below the trading range of the previous day, but the price then rises and closes above the midpoint (50%) level of the black/red body of the 1st day candle.
If the following day the price continues to rise and close higher (preferably on a strong volume), it provides confirmation to this bullish reversal pattern.

DARK CLOUD COVER (BEARISH)
Dark Cloud Cover is a top reversal pattern / bearish reversal pattern.
It can be formed at the end of an uptrend, or during a bounce within a downtrend, or at the resistance.

This is a 2-candle pattern which can signal a possible turning point:
The 1st day is long white candle.
The 2nd day is a long black/red body candle that opens sharply higher, above the trading range of the previous day, but the price then drops and closes below the midpoint (50%) level of the white body of the first day.
If the following day the price continues to drop and close lower (preferably on a strong volume), it provides confirmation to this bearish reversal pattern.

To read about other Candlestick Patterns, go to: Learning Candlestick Charts.

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