Support & Resistance Report

[Mr Nasdaq]

The QQQQ slugged its way to the upper end of Monday's thick area of "Gathering Resistance" only to find itself exhausted by the effort:

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When an area of "Gathering Resistance" is wider than usual, as it has been over the last few trading days, whether one should establish a short sale at the front door, or in the middle or near the top of that area can be a difficult question.

One tried and true technique in these cases is to allow the "20-Period Moving Average" of a 5-Minute Chart be your guide.

1) When a "20-Period Moving Average" is rising and
2) the price of the QQQQ is trading above it and
3) finding Support upon pullbacks to it...

then it's always a good idea to postpone a short sale until the "20-Period Moving Average" stops rising and the price of the QQQQ begins to trade below it. The 5-Minute Chart above shows how well that technique would have worked in dealing with Monday's wider than usual area of "Gathering Resistance".