Price Action & Psychology - Pullback, Trend, Support

Hello !

Key points :
  • Notable support zone
  • Pullback after breakout
  • Direction of trend
  • Volume spikes on uptrend
We've pulled back to an historical important zone, which acted as support. We're taking this trade after a breakout on high volume and wide range candles in the direction of the general trend.

Volume represents the number of shares traded on any given day (talking about a daily chart ). So if on that spinning top (2) we've seen high volume , but prices didn't rise, this must mean that sellers were stronger.

I see a few clues here :
  • Those that bought on the previous resistance (1) and were stuck, sold
  • Profit-taking from the breakout (2)
  • The pullback made other traders sell

Considering the price action on the last 2 trading sessions, we see relative low volume and some indecision, we've reached a certain "balance". This tells us that basically, most of the traders are waiting on the side lines.

What we're looking for here, before we take the trade, is volume. We wanna see buyers come into the market.

Thanks for reading and if you have suggestions or want to 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.***


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