{"id":31,"date":"2015-04-26T21:07:24","date_gmt":"2015-04-26T21:07:24","guid":{"rendered":"http:\/\/patternsmart.com\/wp\/?p=31"},"modified":"2026-07-07T22:05:33","modified_gmt":"2026-07-07T22:05:33","slug":"onneck-candlestick-pattern","status":"publish","type":"post","link":"https:\/\/patternsmart.com\/wp\/onneck-candlestick-pattern\/","title":{"rendered":"OnNeck candlestick pattern"},"content":{"rendered":"\n

The On Neck<\/strong> is a two-candle bearish continuation pattern that typically surfaces during an established downtrend. It serves as a stark reminder of structural weakness, signaling that a brief bullish counter-attack has failed to gain ground, leaving the bears firmly in control.<\/p>\n\n\n\n

\"OnNeck<\/a><\/figure>\n\n\n\n

Anatomy of the On Neck Pattern<\/h2>\n\n\n\n

To correctly identify the On Neck pattern on a chart, look for two distinct candles following a clear downward move:<\/p>\n\n\n\n

Attribute<\/strong><\/td>Candle 1 (The Anchor)<\/strong><\/td>Candle 2 (The Reaction)<\/strong><\/td><\/tr><\/thead>
Trend Context<\/strong><\/td>Pre-existing downtrend<\/td>Continuation of the down move<\/td><\/tr>
Type & Color<\/strong><\/td>Long Bearish (Red\/Black)<\/td>Smaller Bullish (Green\/White)<\/td><\/tr>
Opening Price<\/strong><\/td>Continues the dominant bearish momentum<\/td>Gaps down below the low of Candle 1<\/td><\/tr>
Closing Price<\/strong><\/td>Closes near its session low<\/td>Rallies to close exactly at the low<\/strong> (or the close) of Candle 1<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Critical Distinction:<\/strong> The defining feature of the On Neck pattern is that Candle 2 fails to penetrate the real body<\/em> of Candle 1. It closes precisely at the “neckline” formed by the previous candle’s low or close. If it penetrates deep into the body, it becomes a Piercing Line<\/em> pattern, which is a bullish reversal.<\/p>\n<\/blockquote>\n\n\n\n

Market Psychology Behind the Pattern<\/h2>\n\n\n\n

Understanding what happens behind the scenes helps clarify why this pattern implies a continuation of the trend:<\/p>\n\n\n\n

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  1. Dominance:<\/strong> A strong downtrend is in place, punctuated by Candle 1, which shows intense selling pressure.<\/li>\n\n\n\n
  2. The Trap:<\/strong> The next session opens with a gap down, signaling extreme bearishness. Seeing the asset stretched thin, buyers step in to exploit the cheap prices, driving a intraday or intra-session rally.<\/li>\n\n\n\n
  3. The Wall:<\/strong> Despite the buying momentum, the bulls hit a hard ceiling at the prior candle’s low. Sellers aggressively defend this level.<\/li>\n\n\n\n
  4. The Resolution:<\/strong> The session closes without making any progress into the real body of Candle 1. The bulls have exhausted their energy just to fill a fraction of the gap, proving they lack the strength to reverse the macro trend.<\/li>\n<\/ol>\n\n\n\n

    Technical Trading Strategies<\/h2>\n\n\n\n

    When executing trades based on the On Neck pattern, reliance on raw candles alone carries execution risk. It requires mechanical confirmation.<\/p>\n\n\n\n

    1. Entry and Execution<\/h3>\n\n\n\n