Weekly Charting - 20th April 2018, page-19

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justinh

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20/04/18

22:44

Post #: 32598277
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Originally posted by Jako8557 ↑

yes, that first one was a little tricky, as there were some mixed signals being given out

I was a bit unsure as to whether to include it or not, but it is a real world problem.
There are many times when the price action is uncertain for a period of time.... and then.... it all comes clear.

If I had cut it off four bars later (the breakdown bar), im sure most would have worked out the answer pretty quickly.

What I did want to show was the subtle tell tale signs that the stock was giving off prior to the breakdown.
Those two questionable pull backs, the gap up narrow spread on very high volume, and the downbar in response...
"if all that volume was buying on the gap up bar, why didn't it make more ground higher (potential Effort/Reward Failure),
or put another way, why was the spread so narrow on such high volume, if it was all buying,
and also, how could the next bar be down if it was all buying".....
the answers to all the questions are -
"because that gap up bar was actually full of supply (selling)"

So to reiterate - The tell tale signs before the breakdown were -
The questionable trading prior
The gap up and narrow spread upbar when compared to the very high volume (volume and spread are usually relative).
Close in the middle
Next bar down in response

cheers

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Weekly Charting - 20th April 2018, page-19

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Weekly Charting - 20th April 2018, page-19

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