BEARISH ON NECK
| Type: | Continuation |
| Relevance: | Bearish |
| Prior Trend: | Bearish |
| Reliability: | Medium |
| Confirmation: | Suggested |
| No. of Sticks: | 2 |
Bearish On Neck Pattern is a black candlestick followed by a small white candlestick, which is characterized by a closing price near the low of the black candlestick during a downtrend. If the low of white candlestick is broken down, market goes further down.
Recognition Criteria:
1. Market is characterized by downtrend.2. We see a long black candlestick in the first day.
3. Then we see a white candlestick on the second day, which opens below the low of the previous day. This day does not need to be a long day or it might resemble the Bullish Meeting Line Pattern.
4. The closing price of the second day is either the low price of the first day or almost same.
Explanation:
The Bearish On Neck Pattern is an undeveloped version of the Bullish Piercing Line Pattern. It is a similar pattern except that the second day's white body only gets up to the previous day's low. The Bearish On Neck Pattern usually appears during a decline and is a typical pattern in a downtrend. Bearishness increases with the long black first day. The market shows a gap down on the second day, but cannot continue the downtrend. Prices start going up but they stop at the previous day's low price. This bearish occurrence is uncomfortable for potential bottom pickers. The downtrend may continue for a short while.
Important Factors:
The Bearish On Neck Pattern is different from the Bullish Meeting Lines Pattern.
The likelihood of the downward trend increases if the trading volume on the second day is high.
Confirmation on third day is required in the form of a black candlestick, a gap down or a lower close.