An In Neck is an uncommon two-candle stick pattern. It is a tall down candle followed by a considerably shorter up candle. It gaps down on the open but closes slightly higher than the close of the preceding candle.
The first line shows a black candle that appears in a downtrend. The upper and lower shadow lengths of the white candle in the second line are limited to twice the length of the body. Since the In Neck is showing signs of a downturn, the candlestick pattern is seen as a bearish continuation pattern.
This means that;
- In an In Neck pattern, the price is in a downward trend as the bears are in charge.
- The downtrend is maintained by the first candle, which is bearish, and the second candle, which is bullish.
- The white candle, which gapes down and opens under the black candle, and closes a little above it suggesting that the current trend is likely to continue.
How to Identify an In Neck Pattern
To identify an In Neck pattern, you must look out for the following;
- There must be a downtrend in progress in an In Neck pattern,
- There should be a tall and black bearish candle,
- A smaller white bullish candle should follow the black candle,
- The white candle should close at or just above the close of the preceding candle, but it should open below the prior candle.
