Wednesday, December 27, 2006 8:04:19 PM
QQQQ - Wednesday's 5-Minute Chart...
Having found Support at Tuesday's area of Gathering Support, the QQQQ rose to test Wednesday's area of Gathering Resistance.
Wednesday's 5-Minute Chart (below) shows the QQQQ pulling back from Gathering Resistance in early trade in order to fill the morning gap. After filling the gap, the QQQQ mounted a second challenge to Gathering Resistance and closed within its boundaries.
When an important aspect of Support is violated (like the 50-Day Moving Average has been), a stock will often return to the former aspect of Support in order to test Resistance there (Support, when violated by a falling price, becomes Resistance). That's what the QQQQ did on Wednesday.
On Thursday, the QQQQ is poised to give Resistance at its 50-Day Moving Average another test.
The QQQQ must capture and hold its 50-Day Moving Average in order to regain a clean bill of health for the intermediate-term (the weeks and months to come).
The area above a 50-Day Moving Average is often regarded as 'buy all dips' territory while the area below a 50-Day Moving Average is regarded as 'sell all rallies' territory.
Each day's area of Gathering Support and Gathering Resistance is calculated the night before:
Having found Support at Tuesday's area of Gathering Support, the QQQQ rose to test Wednesday's area of Gathering Resistance.
Wednesday's 5-Minute Chart (below) shows the QQQQ pulling back from Gathering Resistance in early trade in order to fill the morning gap. After filling the gap, the QQQQ mounted a second challenge to Gathering Resistance and closed within its boundaries.
When an important aspect of Support is violated (like the 50-Day Moving Average has been), a stock will often return to the former aspect of Support in order to test Resistance there (Support, when violated by a falling price, becomes Resistance). That's what the QQQQ did on Wednesday.
On Thursday, the QQQQ is poised to give Resistance at its 50-Day Moving Average another test.
The QQQQ must capture and hold its 50-Day Moving Average in order to regain a clean bill of health for the intermediate-term (the weeks and months to come).
The area above a 50-Day Moving Average is often regarded as 'buy all dips' territory while the area below a 50-Day Moving Average is regarded as 'sell all rallies' territory.
Each day's area of Gathering Support and Gathering Resistance is calculated the night before:
Buy at Support
Sell at Resistance
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