The most "bullish" action that the market can afford is to inflate prices even higher. Despite the fact that technicians, as a rule, analyze each column in the context of adjacent columns, even a single column can tell a lot to a careful observer.
Buyers throughout the entire trading day inflate the price. In addition, the price at the time of opening is the lowest for the whole day. The daily price range for the bar shown in this example is $ 2, and the price at the close of trading was the highest for the whole day.
If you are monitoring the situation, you will come to the conclusion that this day the bulls have achieved some success and set the tone for the market. Bears holding short positions were hit on the most sensitive place for themselves - their wallets. The trader takes a short position, borrowing shares from the package and selling them in the hope of making money if the price of these shares falls. This trader will lose money if the stock price rises. The mechanism of short sales is described in detail in Chapter 14. The example in 9.4 shows,that at the opening of trading the stock price was at the lowest level, and at the closing of trading at the highest level, but nevertheless this picture is no less “bullish” when at the time of opening of trading, the price of shares is near its minimum level , and at the close of trading - near its maximum level.
9.5 shows a model of a single “bearish” direction column. At the time of the opening of trading, the stock price was $ 11.75. Then the price rose to $ 12, after which it dropped to $ 10, and then, at the close of trading, it was $ 10.25. These shares did not necessarily have to decline to the lowest level on this day, so that they could be called "bearish" - it is enough to close close to the minimum level.
These pictures for a single column may be useful for a trader who is trying to understand the main driving forces that determine the behavior of the market. Whether these pictures represent a favorable opportunity for executing trading operations depends on the recent behavioral history of these actions, as well as on whether this picture is confirmed by the corresponding trading volume. Later in this chapter we will give a few examples.when the model of a single column of “bullish” directivity gives a buy signal.
Soap Snowflake - make a gift for the New Year with your own hands
A simple amplifier on the LM386 chip
For a free trip, the girl turned a small van into a cozy bedroom
Basic rules of fashionable beating
10 reasons to read Alice Clover’s books