The double bearish candlestick patterns are formed by two candlesticks. They are of three main types:

a)      Bearish engulfing pattern

b)      Tweezer tops

c)       Dark-cloud cover

a)      Bearish engulfing candlestick pattern

This pattern usually appears at the end of an uptrend and it is formed by two candles in which a bullish candle is immediately followed by a larger bearish candle.

For a bearish engulfing pattern to be formed, the body of the second candle (bearish) must entirely “engulf” the first candle (bullish).

As such, this is a clear signal that the bearish pressure may soon take control of the market after a recent strong move to the upside.

Just like in the bullish engulfing pattern, the shadows at the ends of the bearish engulfing pattern may be swallowed up; however, it’s not necessary.

A doji may also appear in some instances as the first candlestick.

It is worth mentioning that the bearish engulfing pattern gives stronger indications for an imminent trend reversal when the first candlestick has a small body and the second candlestick has a big body.

More over, the emerging bearish power is stronger when the second candlestick engulfs more than one candlestick.

How to identify a bearish engulfing pattern

• The pattern is formed by two candlesticks having different colors
• The body of the large bearish candlestick should completely engulf the preceding small bullish candlestick.
• It appears at the end of an uptrend

When seen on a chart, the pattern may look something like this:

b)      Tweezer tops

Tweezer tops are bearish reversal patterns that are often found at the end of a strong uptrend. Just like in tweezer bottoms, tweezer tops is formed from two candlesticks that are next or so close to each other.

In addition, they may also have small bodies just like doji or inverted hammer candlesticks.

Generally, tweezer tops have identical highs and the pattern is formed by the candlestick shadows. In some instances, it may be formed by the bodies of the shaven candlesticks.

The two candlesticks forming the tweezer tops pattern should have different colors. As such, the first candlestick will confirm the current trend while the second candlestick will indicate that the trend is no longer strong.

It is worth mentioning that tweezer tops that are found close to strong support levels or trend lines give stronger indications of imminent trend reversal, especially when they are made of two doji candlesticks.

In addition, the pattern is also strong if it forms another pattern; for instance, a bearish engulfing pattern with identical lows.

If the shadows are long, the potential trend reversal generated by this pattern becomes more believable.

It is possible for a few or some candlesticks to be found between the two candlesticks that form the tweezer tops pattern and form the double top chart pattern.

How to identify tweezer tops

• It appears in an uptrend
• The first candle should be the same as the immediate trend. In this case, the first candle should be bullish.
• The second candle should be opposite the immediate trend. In this case, the second candle should be bearish.
• The shadows of the candlesticks ought to be equal or nearly equal in length. The highs of tweezer tops ought to be the same or nearly the same.

When seen on a chart, the pattern may look something like this:

c)       Dark cloud cover

The dark cloud cover pattern is a bearish trend reversal pattern formed by two candlesticks. The pattern appears towards the end of an uptrend and it is the opposite of the piercing candlestick pattern.

For the dark cloud cover pattern to be valid it has to appear in an uptrend and the second candlestick has to close below the midpoint of the real body of the first candlestick, indicating a change in sentiment.

It is important to note that the dark cloud candlestick pattern carries more weight when:

• The second candlestick (bearish) considerably pierces the real body of the first candlestick (bullish)
• The two candlesticks forming the pattern are shaven (they have no shadows), just like in marubozu candlesticks
• It appears around trend lines, pivot points, or support and resistance zones
• The closing price of the second candlestick is close to the opening price of the first candlestick
• The second candlestick is opened at the close of the first candlestick and its is closed at the open of the first candlestick

How to identify a dark cloud cover pattern

• It appears in an uptrend
• It is formed by two candlesticks in which the first is a bullish candlestick and the second is a bearish candlestick
• The bearish candlestick should close below the middle of the real body of the first candlestick

When seen on a chart, the pattern may look something like this:

Summary

The three main types of double bullish candlestick patterns are bullish engulfing, tweezer bottoms, and piercing pattern.

These candlestick patterns mostly appear at the end of a downtrend, indicating that an uptrend is imminent.

Before entering trades based on the analysis of these patterns, it is important that you confirm your trading decision by using indicators, other chart patterns, support and resistance levels, fundamentals etc.