Price Action & Psychology - Pullback, MTFA
Hello !
Key points :
I like pointing out the fact that stocks hold on to certain historical support zones. Traders and investors tend to remember them well, as you can see below :
The general trend is "bullish", meanwhile the temporary trend is "bearish" (correction/pullback). The fact that we saw the volume fade means that the downtrend is running out of steam.
In fact, the engulfing pattern we see, coupled with a higher volume on the green day, confirms the theory that buyers are taking control back, i.e. the primary trend might be about to resume.
Now, on the weekly chart, we spotted that old support zone. And this is what the hourly chart looks like :
Pullbacks can be seen on any timeframe. It seems like that support we defined previously, still matters.
Because stocks never move straight to the upside, we can expect a pullback on the hourly chart. This will be the signal we're waiting for.
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.***
Key points :
- Pullback after over-extension
- Fading volume, downtrend losing steam
- Engulfing on higher volume
- Wide-range candles defining a strong upward movement
I like pointing out the fact that stocks hold on to certain historical support zones. Traders and investors tend to remember them well, as you can see below :
The general trend is "bullish", meanwhile the temporary trend is "bearish" (correction/pullback). The fact that we saw the volume fade means that the downtrend is running out of steam.
In fact, the engulfing pattern we see, coupled with a higher volume on the green day, confirms the theory that buyers are taking control back, i.e. the primary trend might be about to resume.
Now, on the weekly chart, we spotted that old support zone. And this is what the hourly chart looks like :
Pullbacks can be seen on any timeframe. It seems like that support we defined previously, still matters.
Because stocks never move straight to the upside, we can expect a pullback on the hourly chart. This will be the signal we're waiting for.
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.***