“Dark Cloud Cover” after “Morning Star”

DAX opened with an upside gap and rallied to 10164. However, higher level could not be sustained and it felt down to 9929 and closed at 9961 with a loss of 24 points. Daily candlestick shows a “Dark Cloud Cover” after “Morning Star” pattern.  DAX is in a down trend after a fall below 200 DMA with huge down side gap. Daily MACD is in a sell mode and stochastic is falling.

Today’s negative close could mean much more and deeper downside!

BREAKING DOWN ‘Dark Cloud Cover’

Essentially, the large black candle is forming a “dark cloud” over the preceding bullish trend.

The dark cloud must have a closing price that is:
1) within the price range of the previous day, but
2) below the mid-point between open and closing prices of the previous day.

Read more: Dark Cloud Cover Definition | Investopedia

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