Candlestick Pattern Encyclopedia

Piercing & Dark Cloud

Partial Engulfing Patterns

These patterns are like "weak engulfing" - the second candle doesn't fully engulf the first, but penetrates at least 50% into its body.

PIERCING LINE (Bullish)

     ┌───┐
     │   │ ←Red
     │   │
     │   │........← 50% level
     └───┘
   ┌─────┐
   │█████│ ←Green opens below, closes above 50%
   │█████│
   └─────┘
Requirements:
1. Downtrend in progress
2. First candle is bearish
3. Second candle opens BELOW first candle's low
4. Second candle closes above the 50% mark of first candle

What it means: Sellers gap down, but buyers fight back hard.
Signal: Bullish reversal.
Nickname: "The Comeback"

DARK CLOUD COVER (Bearish)

   ┌─────┐
   │█████│ ←Green
   │█████│
   │█████│........← 50% level
   └─────┘
     ┌───┐
     │   │ ←Red opens above, closes below 50%
     │   │
     └───┘
Requirements:
1. Uptrend in progress
2. First candle is bullish
3. Second candle opens ABOVE first candle's high
4. Second candle closes below the 50% mark of first candle

What it means: Buyers gap up, but sellers overwhelm them.
Signal: Bearish reversal.
Nickname: "The Storm" or "The Eclipse"

Strength Levels

Penetration depth matters:
- Closes at 50%: Minimum valid signal
- Closes at 60-70%: Strong signal
- Closes beyond 80%: Very strong (almost engulfing)
- Closes at 100%+: Full engulfing pattern

The deeper the penetration, the stronger the signal. A Piercing Line that closes at 75% of the first candle is much more bullish than one that barely hits 50%.

Key Takeaways

  • Piercing Line = bullish, opens low, closes above 50% of prior red
  • Dark Cloud = bearish, opens high, closes below 50% of prior green
  • Deeper penetration = stronger signal
  • Gap on open is required for classic pattern