range trades
when a stock begins trading in a range, the longer the range continues, the more significant it becomes.
a range is a sign of equilibrium. buyers are accumulating the stock, once it reaches the lower support, they just cant help but buy. sellers are just as equally keen to sell once the higher resistance level is reached.
when a range is broken, this equilibrium is disturbed, so the price can change markedly until a new equilibrium point is found.
here I have drawn a range inside the original one for SMM. i believe this inner range is much more significant. it is also a more realistic one to trade. My plan now is to buy around $0.60 with a target of $0.66 thats a 10%gain. if I miss out on buying then, there is still the possibility of a breakout above resistance which should provide an even better trade.
a range is a sign of equilibrium. buyers are accumulating the stock, once it reaches the lower support, they just cant help but buy. sellers are just as equally keen to sell once the higher resistance level is reached.
when a range is broken, this equilibrium is disturbed, so the price can change markedly until a new equilibrium point is found.
here I have drawn a range inside the original one for SMM. i believe this inner range is much more significant. it is also a more realistic one to trade. My plan now is to buy around $0.60 with a target of $0.66 thats a 10%gain. if I miss out on buying then, there is still the possibility of a breakout above resistance which should provide an even better trade.
posted at: 8:15 am
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