Piercing Line / Dark Cloud Cover

Two-bar reversal pattern. Piercing Line is bullish — a long red bar followed by a green bar that opens below the red bar's low and closes above its midpoint (but inside its body). Dark Cloud Cover is the bearish mirror. Weaker than full Engulfing but stronger than Harami.

Quick reference

Item	Value
Family	Candlestick Patterns
Input type	Candle
Output type	f64 — +1.0 Piercing, -1.0 Dark Cloud, 0.0 otherwise
Output range	{-1.0, 0.0, +1.0}
Default parameters	none — PiercingDarkCloud::new()
Warmup period	2
Interpretation	Two-bar reversal — gap-open then recover

Formula

Piercing Line (+1.0):

prev_red AND curr_green
AND curr.open  <  prev.low
AND curr.close > (prev.open + prev.close) / 2
AND curr.close <  prev.open

Dark Cloud Cover (-1.0):

prev_green AND curr_red
AND curr.open  >  prev.high
AND curr.close < (prev.open + prev.close) / 2
AND curr.close >  prev.open

Output is 0.0 for the first bar. See crates/wickra-core/src/indicators/piercing_dark_cloud.rs.

Parameters

None.

Signed ±1 encoding

This pattern already emits the uniform candlestick sign convention shared across the family — +1.0 bullish, −1.0 bearish, 0.0 no pattern — so it drops straight into a machine-learning feature matrix where the bullish and bearish variants of the pattern occupy a single dimension.

Inputs / Outputs

Indicator<Input = Candle, Output = f64>. Same shape as other two-bar candlestick patterns.

Warmup

warmup_period() == 2.

Edge cases

• Gap-open requirement. Piercing requires curr.open < prev.low (gap below the prior bar). Without that gap, the pattern is not a Piercing Line — it's just a regular bullish bar.
• Partial-engulfing. Closes inside but past the midpoint of the prior body. A full engulfing (close beyond prev.open) is a stronger pattern — see Engulfing.
• Reset. Clears the previous-bar cache.

Examples

Rust

use wickra::{Candle, Indicator, PiercingDarkCloud};

fn main() -> Result<(), Box<dyn std::error::Error>> {
    // Piercing Line
    let prev = Candle::new(105.0, 106.0, 100.0, 100.5, 1.0, 0)?;  // long red
    let curr = Candle::new( 99.5, 103.5, 99.0, 103.0, 1.0, 1)?;    // gap-down, recovers past midpoint
    let mut p = PiercingDarkCloud::new();
    p.update(prev);
    println!("{:?}", p.update(curr));  // +1.0
    Ok(())
}

Python

import numpy as np
import wickra as ta

o = np.array([105.0, 99.5])
h = np.array([106.0, 103.5])
l = np.array([100.0, 99.0])
c = np.array([100.5, 103.0])

p = ta.PiercingDarkCloud()
print(p.batch(o, h, l, c))

Node

const wickra = require('wickra');
const p = new wickra.PiercingDarkCloud();
console.log(p.batch([105, 99.5], [106, 103.5], [100, 99], [100.5, 103]));

Streaming

use wickra::{Candle, Indicator, PiercingDarkCloud};

let mut p = PiercingDarkCloud::new();
let candle_stream: Vec<wickra::Candle> = Vec::new(); // your live OHLCV candle feed
for bar in candle_stream {
    if p.update(bar) == Some(1.0) { /* Piercing Line */ }
    if p.update(bar) == Some(-1.0) { /* Dark Cloud Cover */ }
}

Interpretation

• Failed gap. The current bar opens decisively in the prior trend's direction (gap-down for Piercing, gap-up for Dark Cloud) but reverses inside the prior body — signalling exhaustion of the gap move.
• Midpoint as conviction filter. Closing past the midpoint shows real strength; barely closing inside the body would suggest weak buying / selling that doesn't qualify.
• Pair with Engulfing. Piercing is the "soft" cousin — Engulfing requires the close to pass all of the prior body, not just the midpoint.

Common pitfalls

• Missing the gap. Without curr.open < prev.low (or > prev.high for bearish), the pattern doesn't fire — even on visually similar shapes.
• Without trend context. Same as all candlestick patterns: reversal patterns only carry signal at trend extremes.

References

• Steve Nison, Japanese Candlestick Charting Techniques (1991) — Piercing Line and Dark Cloud Cover.

See also

• Engulfing — stronger sibling reversal pattern.
• Harami — softer reversal cousin.
• MorningEveningStar — three-bar alternative.
• Indicators-Overview — full taxonomy.