In Neck
19 hours agoThe In Neck pattern is an uncommon two-candlestick formation consisting of a tall bearish candle followed by a significantly shorter bullish candle that opens lower but closes slightly above the previous candle's close.
Since the In Neck appears during a downtrend, it is classified as a bearish continuation pattern.
This candlestick pattern consists of just two candles: one black and one white.
To recognize the In Neck pattern, look for the following criteria:
- A downtrend must be underway.
- A tall black (bearish) candle must be present.
- A smaller white (bullish) candle must follow the black candle.
- The white candle should open below the previous candle but close at or slightly above the close of the prior candle.
The In Neck pattern closely resembles the On Neck pattern, which also occurs in a downtrend and indicates a continuation of the existing trend.
However, the key distinction is that in the On Neck pattern, the second candle closes slightly lower than the previous candle's low.
Given the similarities between the two patterns, it is important to be able to differentiate between them.
In terms of meaning, the bears are in control, indicating that the price is in a downtrend. The first candle is bearish, reinforcing the downtrend, while the second candle is bullish. The white candle gaps down, opening below the black candle but closing slightly above it, suggesting that a continuation of the current trend is probable.
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