On-Neck Pattern candlestick pattern

The On-Neck pattern is a significant bearish continuation pattern featuring two candlesticks. This pattern cannot be called a strong figure.

The pattern has the slightest difference with the In-Neck pattern in the closing prices of their 2nd candlestick. In the On-Neck pattern, its 2nd candlestick closes at or very close to the lowest price of the first candlestick (see the image). The In-Neck pattern differs by having its closing price slightly above or approximately at the closing price of the first candlestick, the bottom of the red body.

Both patterns emerge within a downtrend, representing brief pauses before the resumption of the prevailing downtrend movement. The On-Neck can be considered a stronger pause: the price may rise by a few units and after a short pause, continue to fall downwards.

Construction

1st

• continuation of downtrend
• long red body

2nd

• much smaller green body (compared to 1st candlestick)
• opening price with the gap down below 1st candle closing price
• closing price close to 1st candle lowest price (bottom shadow)^①

Traders should use the On-neck pattern in conjunction with other forms of technical analysis, such as chart patterns or technical indicators. This is because the pattern could result in a move in either direction (there is a chance that the price will go up).

Note that the higher the second green candle closes, the more likely it is another candlestick pattern and a market reversal will occur. For example, Piercing Line or Bullish Engulfing.