Identifying bullish neck lines

The setup day of the bullish neck line pattern is a long white candle that indicates a lot of buying, and the signal day is a black candle that may be long or short. The close of the signal day will be very near the close of the setup day. If that's the case, it may be said that it's "on neck." If the close of the signal day is a little lower than the close of the setup day, the pattern is instead said to be "in neck." You can see examples of both in Figure 7-28. Notice that they're pretty similar.

Both the on neck and in neck bullish neck line patterns tell the same story, so it's not necessary to separate them for discussion. As I mentioned, they occur during an uptrend. The signal day has a gap opening that brings in sellers, but there's not enough selling to trade too much (or at all) below the previous day's close. You may recognize these patterns as more bullish versions of the bullish thrusting lines discussed earlier in this chapter.

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