The On Neck pattern is a two-candlestick technical analysis charting pattern that indicates a potential reversal in the trend of an asset. It is created when there is a tall down candle, followed by another much shorter up candle that gaps down on the open but then closes at or near the prior candle’s close. This type of candlestick formation can signal to traders and investors that it may be time to buy, as prices have reversed from their downward trajectory and could potentially continue upwards in price action.The On Neck pattern occurs most often after extended downtrends where buyers are trying to take advantage of oversold conditions for an entry point into long positions. The first long red bar signals sellers were able to push prices lower but then buyers came back into play with enough strength for them to close above or near the opening price level again which creates this unique candlestick formation . By closing above or near its previous open, it shows buying pressure was strong enough not only drive prices higher off their lows but also sustain those gains until market close which gives bullish traders confidence they should enter now before further upside momentum takes hold..In conclusion, The On Neck Pattern is one way technical analysts look out for reversals in trends so they can capitalize on possible new uptrends as soon as possible while minimizing risk exposure due its relatively low failure rate compared other chart patterns like head & shoulders formations etc.. While this particular setup isn't foolproof by any means since markets don't always behave how we expect them too; however if you're looking at entering trades based off these types of setups make sure you understand all aspects involved such us volume levels , support/resistance levels etc., so your trading decisions are better informed ones going forward.
