On Neck

The Psychology
The On Neck pattern is a more severe relative of the In Neck pattern because it fails to rally as much intraday. A gap down is seen as a buying and short covering opportunity, but failure to rally the stock up into the previous day's range indicates the buying most likely will be brief and the downtrend will resume.

A long black day is followed by a long white day that gaps down at the open and closes below the close of the black day.

Pattern: continuation
Reliability: moderate