May 16, 2009
Japanese Candlestick Pattern
By Planet Wealth
The XAO has now confirmed 3900 resistance from 2005 to still be valid.
By respecting the resistance this week, a powerful Japanese Candlestick Pattern has formed. The Dark Cloud Cover. What is a Dark Cloud Cover?
The Dark Cloud Cover Pattern is a bearish reversal pattern, found at the top of an uptrend. It is a two-candle pattern where the first day shows a bullish green candle continuing the uptrend. The second candle opens higher than the previous day and pushes lower and closes below the open price, bringing with it the potential of breaking the upward trend. The key requirement for the Dark Cloud Cover pattern is that the bearish day closes at least half way down the previous day’s candle.
If we look over the last 18 months, there have been 3 other Dark Cloud Covers formed at major resistances. Each one has produced a significant drop in the immediate weeks following.
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