Neckline

A level of support or resistance found on a head and shoulders pattern that is used by traders to determine strategic areas to place orders. Each peak of a regular head and shoulders pattern falls toward a support level, also known as a neckline, before it rises to create the next peak. A move below the neckline (in the case of a head and shoulders top) is used by traders as a signal of a reversal of the current uptrend.

Neckline

It is possible to see the slope of a neckline be drawn at a slight angle rather than horizontal like the one shown in the image above. However, regardless of its slope, a move below the neckline of a regular head and shoulders pattern is always used as a signal of a move lower.

In the case of an inverse head and shoulders, the neckline is found as a level of resistance that has prevented the price from heading higher. A move beyond the neckline in this case would be used to signal the start of an uptrend.


Investment dictionary. . 2012.

Look at other dictionaries:

  • neckline — (n.) also neck line, of a garment, 1900, from NECK (Cf. neck) (n.) + LINE (Cf. line) (n.) …   Etymology dictionary

  • neckline — ► NOUN ▪ the edge of a woman s garment at or below the neck …   English terms dictionary

  • neckline — [nek′līn΄] n. the line formed by the edge of a garment around or nearest the neck …   English World dictionary

  • Neckline — The neckline is the top edge of a garment that surrounds the neck, especially from the front view. Neckline also refers to the overall line between all the layers of clothing and the neck and shoulders of a person, ignoring the unseen… …   Wikipedia

  • neckline — neck|line [ˈnek laın] n [C usually singular] the shape made by the upper edge of a piece of woman s clothing around or below the neck ▪ a square neckline low/plunging neckline (=leaving part of the chest uncovered) ▪ Her evening gown had a… …   Dictionary of contemporary English

  • neckline — [[t]ne̱klaɪn[/t]] necklines N COUNT: oft supp N The neckline of a dress, blouse, or other piece of clothing is the edge that goes around your neck, especially the front part of it. ...a short brown dress with a plunging neckline. ...a dress with… …   English dictionary

  • neckline — noun (countable usually singular) the shape made by the upper edge of a piece of woman s clothing around or below the neck: a flattering scoop neckline | low/plunging neckline (=leaving part of the chest uncovered): Her evening gown had a… …   Longman dictionary of contemporary English

  • neckline — UK [ˈnekˌlaɪn] / US noun [countable] Word forms neckline : singular neckline plural necklines the shape of a piece of clothing around your neck a low/round neckline …   English dictionary

  • neckline — /nek luyn /, n. the opening at the neck of a garment, esp. of a woman s garment, with reference to its shape or its position on the body: a V neckline; a high neckline. [1900 05; NECK + LINE1] * * * …   Universalium

  • neckline — n. a high; low, plunging; sweetheart neckline * * * [ neklaɪn] low plunging sweetheart neckline a high …   Combinatory dictionary

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