The Pattern (see: Pattern) can be viewed as a more formation, it completely rejects the gains of Day 1 and usually closes below the lows of Day 1.
Dark Cloud Cover is a reversal pattern, similar to the Pattern (see: Pattern). There are two components of a Dark Cloud Cover formation:
dark cloud cover chart pattern
Candle (Day 1)
Candle (Day 2)
A Dark Cloud Cover Pattern occurs when a candle on Day 2 closes below the middle of Day 1's candle.
In addition, price gaps up on Day 2 only to fill the gap (see: Gaps) and close significantly into the gains made by Day 1's .
The rejection of the gap up is a sign in and of itself, but the retracement into the gains of the previous day's gains adds even more sentiment. Bulls are unable to hold prices higher, demand is unable to keep up with the building supply.