We often see similarities in chart patterns and the most important thing to understand about interpreting them is that the second time around the resolution is most likely going to be different.
If you look at the two trading ranges i have indicated by thick blue lines, they are defined not by their upper and lower limits but by the 995-997 level in the previous trading range and the 1025 level during this current one.
The key to these levels is that they offer a sort of gravitational pull and when they get established it requires a tremendous amount of either buying or selling pressure to break free of it. The farther it goes away from its normal orbit without breaking the more violent the snapback. This what is happening today at the pre-open shows what happens with a failed attempt to break free of the trading range. yesterdays test of the 1017 level didn't produce a break and as a result we are back in the upper range.
A close above 1035 would make me start to add into a small long position and a close above 1038 would make me long for a run up to at least 1054.
There really isn't a bearish perspective other than a rejection of this test of the upper end of the range.
No comments:
Post a Comment