Pattern Detail

Bearish On Neck Line

Two-candle pattern: a down candle gaps up but closes right back at the prior up candle's high, a weak bounce that often gives way.

A real Bearish On Neck Line on NQ daily bars, Jun 19, 2024. Price then followed through 1.1% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
A real Bearish On Neck Line on NQ daily bars, Jun 19, 2024. Price then followed through 1.1% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.

Shown only on the markets where this pattern occurs.

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How to read this

Everything here is in R, the setup's own risk. 1R is the distance from the entry (the pattern's closing price) to where it would be proven wrong — its highest high over the 2 bars that form it. So "offered 2R" means price ran twice that distance in your favor at some point before the stop. It does not assume you took profit there: a target is a strategy choice.

Room offered (≥ 1R)

22.2%

Too few to trust

Offered at least 1× its risk before the stop, vs 39.7% for a random short entry (-17.5 pts).

Move size vs normal

1.13×

Realized range over the next 20 bars vs a random bar. Precedes a bigger move.

Typical room (20-bar)

0.69R

Average run in favor (capped at 3R), vs 1.04R for a random short entry.

Summary

Offered ≥1R 22.2% of the time vs 39.7% for a random short entry. The 17.5-point gap is no bigger than the ±32.0-point margin of error you would get by chance from 9 occurrences. Not a reliable edge.

Room offered, this setup vs a random short entry

Only 9 occurrences. The breakdown below is shown in full, but a sample this small is anecdotal, a hint, not a measured edge. That is usually a limit of available history, not a flaw in the pattern. For a firmer read, try a lower timeframe or a more active instrument.

Outcome This setup Random entry Edge
Offered ≥ 1R 22.2% 39.7% -17.5
Offered ≥ 2R 22.2% 27.2% -5.0
Offered ≥ 3R 22.2% 19.7% +2.5
Stopped < 1R 77.8% 59.0% +18.7
Went sideways 0.0% 1.3% -1.3

9 occurrences · 354,524 random-entry controls · 20-bar horizon

A bearish on neck line is a two-candle pause. An up candle runs with the trend, then the next session gaps higher but sellers pull the close back down to sit right at the first candle’s high. The bounce barely holds. That stall at the prior high is the neckline, and a failure to build on the gap hints the buyers are running thin.

How to spot it

  • The market is rising into the pattern.
  • The first candle is an up (green) candle.
  • The second candle gaps open above the first.
  • The second candle is a down (red) candle.
  • It closes at nearly the level of the first candle’s high, the neckline.

The dashed box on the chart above marks the 2 candles on a real occurrence, with the advance before and the move after.

The psychology

The first candle runs with the trend and closes up, so buyers still look to be in charge. The next session gaps higher, opening above the first candle, which keeps the bullish look alive at the start. Then sellers go to work and drag the close all the way back down to sit right at the first candle’s high. The gap is given back entirely, and the session settles on that prior high, the neckline.

What traders read here is a bounce that could not build. Buyers had the higher open and lost every bit of it by the close, settling exactly where the previous candle topped out rather than pressing on. That stall is the worry. In a healthy advance the gap would have led somewhere, and instead it stuck at the old high, hinting that the buyers carrying the move are running thin. The cleaner the close sits on that neckline, the clearer the stall, and a failure to hold ground gained often comes before the trend gives way.

A bounce that goes nowhere is only a hint, and the numbers below weigh how often it precedes a turn.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close up to the pattern’s invalidation point: the highest high of the two candles that form it. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful resistance level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

Sample Bearish On Neck Line Firings (9)

Based on data through Apr 29, 2026

Time Risk (pts) Room offered Result
Aug 5, 2025, 8:30 AM CDT 48.75 0.00R Stopped
Jan 7, 2020, 8:30 AM CST 7.75 0.00R Stopped
Dec 2, 2014, 8:30 AM CST 5.75 0.00R Stopped
Feb 15, 2013, 8:30 AM CST 2.25 0.00R Stopped
Jul 4, 2011, 9:02 AM CDT 0.5 0.00R Stopped
Apr 5, 2010, 8:30 AM CDT 6 0.21R Stopped
May 22, 2009, 8:30 AM CDT 5 3.00R Ran ≥1R
Feb 12, 2009, 2:55 PM CST 1 0.00R Stopped
May 16, 2008, 8:30 AM CDT 4.5 3.00R Ran ≥1R

Sample backtests (2)

Real backtested runs of this pattern, with commissions and slippage. Open one for the full equity curve and metrics, or backtest it yourself on your own contract and dates.

Backtest this pattern

Run it on your contracts, timeframes, and dates.