Key points :
It all starts with the halfway retracement. The stock makes a new low, buying pressure kicks in, drives price up. The halfway retracement is the result of traders taking profits, see how the fades ?
Anyway, the momentum is not enough to break through the resistance and keep the trend going, it reverses.
See how that seems to be a reference point, marked by the indecision ( ) and the spike in .
The gaps on the way up tell us that buyers are really aggressive (or covering their shorts).
On the way down, there's once again buying pressure ( + ) around that previous halfway retracement.
Note how the crumbles down and the marks the last burst of the downtrend.
is rising, there's still a healthy balance between buyers and sellers, we should see an increase in traded shares today.
- Those that bought too early (circled zone) either sold or are still holding (an might re-enter or add to their loser)
- Some will probably buy the or the just the support
- It is very unlikely that traders are going to short this zone
- Those that have an open short position will cover
Thanks for reading and if you have suggestions or wanna discuss the idea, just leave a comment, I'll be happy to answer.
***Disclaimer : This is not an advice to buy the stock. Please, be aware that trading is a matter of probabilities and that it only takes ONE trader to deny your trade.***