The dark Cloud Cover is the bearish counterpart to the Piercing pattern. The first day of the pattern is a long white candle atthe top end of a trend. The second day’s open is higher that the high ofthe previous day.It closes atleast one-half way down the previous day candle,the further down the white candle,the more convincing the reversal. Rememberthat a close at or below the previous day’s open turns this pattern into a Bearish Engulfing pattern. Kabuse means to get covered or to hang over.
This two-candle bearish reversal pattern is the bearish converse of the piercing line, occurring at the top of a bullish trend. The first bullish candle is followed by a bearish candle that opens at a new high and then closes at least halfway down the body of the bar preceding it. The strength of the reversal signal is proportionate to the length of the second candle. This pattern is clearly conceptually and mathematically similar to the Piercing Line and Tweezer patterns.