So, in my view the two most likely scenarios are shown above. We are at strong resistance here, but we tested the top trend line recently, were shut down, and got some more fuel so we may just break through this time. Or it's possible that we fail to break though again, and then it becomes likely that we will go back down to support in this massive pennant/wedge.
There is STRONG support in the $390-$400 range. First off, $400 has a long history of being strong horizontal support and resistance, also just a round number which is psychologically important. Second, there is strong support from the bottom red trend line of this massive pennant. Third, the 30, 50, and 100 SMA's on the 1d chart all converge around here. Lastly, we have the 23% fib line from the drop from all time highs to the flash crash in January.
So, if we do follow the second scenario, to me this is a huge opportunity to buy the dip, one last chance to get long in this massive cup and handle. Plenty of bears out there, but I won't believe them and change my mind until the $390-$400 area breaks with volume and is not just a wick down.
There is STRONG support in the $390-$400 range. First off, $400 has a long history of being strong horizontal support and resistance, also just a round number which is psychologically important. Second, there is strong support from the bottom red trend line of this massive pennant. Third, the 30, 50, and 100 SMA's on the 1d chart all converge around here. Lastly, we have the 23% fib line from the drop from all time highs to the flash crash in January.
So, if we do follow the second scenario, to me this is a huge opportunity to buy the dip, one last chance to get long in this massive cup and handle. Plenty of bears out there, but I won't believe them and change my mind until the $390-$400 area breaks with volume and is not just a wick down.
Comment:
Neglected to put the strong horizontal resistance around $460 in the chart, so really in either scenario we would likely hesitate or pull back at that level but eventually go higher.
Comment:
So, while the last pennant/triangle was valid (had many touches), we have formed an even bigger one. Obviously one must be careful about selecting lines to fit what they want to see, but in this case, it seems we have an even bigger, valid, triangle/pennant. The idea is still the same, I am okay with readjusting here especially because no matter which triangle you look at or lines you use, we have had lower highs and higher lows for months now, so a HUGE move is likely here, this is whats most important to note.
