Piercing Line / Dark Cloud Cover — what it is and how to use it in trading
Definition
Piercing Line is a bullish two-candle reversal: after a falling candle, the next one gaps down below its low but closes back above the midpoint of the first candle's body. Dark Cloud Cover is the mirror bearish pattern after a rising candle: it gaps up above the high but closes back below the midpoint of the body.
How it works in the builder
piercing_line/dark_cloud_cover are boolean operands with no parameters: they check both a gap beyond the previous candle's extreme AND a close past the midpoint of the previous body — but WITHOUT closing past that candle's own open (that stronger case is Engulfing, a different operand).
What it looks like on the chart
The second candle visibly gaps past the first candle's extreme, then closes back deep inside its body, stopping short of a full Engulfing — the "piercing"/"cover" only reaches the midpoint, not the far edge.
Typical use
Typical condition: piercing_line == 1 at a support level, often combined with an oversold rsi(14) < 30 for extra confirmation.
Common pitfalls
Weaker than Engulfing since the second candle doesn't fully cover the first. On continuously-traded instruments (e.g. crypto trading 24/7) real gaps beyond the previous candle rarely occur, so the pattern fires noticeably more often on markets/timeframes with real session gaps (FX opens, daily equities) than on always-on instruments.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.
Piercing Line
Block variants
Dark Cloud Cover