Bearish In-Neck On-Neck Thrusting Continuation Patterns

B

Direction : Bearish
Type : Continuation
Reliability : Moderate

 

First day we’d see a long red candle

The second day is blue day, opening below the low of the first day and closing barely into the body of the first day.

In Neck
On Neck

 

In non-FX markets the In Neck starts with the red continuation candle, day two gaps down to open well below the close of day one – then rallies back up to day-one’s close. In Neck suggests that the despite the large bullish move by the blue star on day-two – when the market moves deeply down, only to rally back it, the market is still continuing the downtrend and capable of additional bear moves in days to come.

The On Neck suggests very similar analysis of market sentiment. But because the On Neck does not trade up to the previous day’s close or into day-one’s candle, it serves as a strong bearish continuation signal.

Trusting Patterns (which look similar to Bearish Piercing Lines) again offers similar analysis. But because the Trusting pattern trade well into day-one’s candle, it is the weakest bearish continuation signal.