Neckline
The support or resistance level connecting the lows (or highs) of a reversal pattern — the line whose break confirms the pattern.
The Neckline is a critical reference level in reversal patterns such as Head and Shoulders, Inverse Head and Shoulders, and Double Tops/Bottoms. It is drawn through the reaction lows (in a bearish H&S) or reaction highs (in a bullish IH&S).
A candle close through the neckline is the official confirmation of the reversal. The neckline also serves as a reference for the measured target (project the pattern height from the break). Slanted necklines (not horizontal) are common and equally valid.
- After the break, the neckline often acts as resistance on throwbacks (in H&S) or support (in IH&S).
- A close back above a broken neckline (in H&S) is a warning the setup may fail.