Trading glossary
What is a neckline?
A neckline is the support or resistance line that a reversal pattern, such as head and shoulders, must break to complete.
In a head and shoulders, the neckline runs through the lows between the shoulders and the head. In an inverse head and shoulders, it runs through the highs. Double tops and bottoms have a neckline too: the level between the two peaks or troughs.
The neckline is the pattern's confirmation level. Until price closes through it, the pattern is incomplete.
How traders use it
- Draw it through the swing points, not through candle bodies.
- Expect the neckline to be retested after the break.
- Measure targets from the neckline, not from the current price.
Example
A double top peaks twice near 1.1000 on EURUSD with a low of 1.0920 between the peaks. 1.0920 is the neckline. A close below it completes the pattern; until then it is only a possible double top.
Frequently asked questions
Can a neckline slope?
Yes. A sloping neckline is common and still valid.
What if price breaks the neckline then returns?
That is a failed breakout, and many traders treat it as invalidating the pattern.
Related terms
Related patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.