February 27, 2009
Support and Resistance
By Planet Wealth
Support and Resistance lines taken from a weekly chart are considered to be stronger than medium term daily support. This is why taking a small term trade off these support levels give higher probability trades.
Here is a case scenario built on ORI. Long Term trend is down. Medium term trend is down. Small term, there is a down trend channel. Today’s candle is at the top of the channel which is also a cross section of a weekly support line that has become resistance and is well respected in the last 3 months (note the highlighted bounces). If tomorrow was to give a bearish down day with excellent volume and supporting indicators, this could be a high probability small trade.
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Topics: candlesticks, Stock Charts, trading patterns | No Comments »
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