In Neck Line
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A two-candlestick bearish continuation pattern appearing during a downtrend. After a large bearish candle, the second candle opens below the previous low but rallies only slightly above the previous low before closing. The weak bounce indicates buyers lack strength, signaling continued decline. Weaker than a thrusting pattern, making it a stronger bearish signal.
After the in neck line is confirmed, enter short when the next candle opens as a bearish candle. Entering when price drops below the second candle's low is also valid.
Project the first bearish candle's body length downward from the second candle's low. Or target the nearest support line.
Place a stop-loss slightly above the second candle's high. Since the bounce is limited, a relatively tight stop is possible.
If the second bullish candle's volume is less than the first bearish candle's, it indicates weak buying pressure and enhances reliability. If volume increases, watch for potential reversal.