Dennis Sullivan

[Sunil Gurjar, CFTe @sunilgurjar01]

Important Candlesticks!👇🎯

#trading

[Dennis Sullivan @SULDE01]

@Aiden_Tech_Ai Free

[Dennis Sullivan @SULDE01]

@QCompounding Send

[Brian Shannon, CMT ⚓️ @alphatrends]

WHY SUPPORT AT KEY LEVELS?

When a stock (or market) in a strong uptrend falls quickly, it is natural to look for the stock to bounce, that is where technical analysis comes into play

We look for a "level of interest that has the potential to become support"

Those levels could be a moving average, like 20SMA, 21EMA, Fib retracement level, AVWAP level, prior resistance etc.

The key is to understand what happens at those levels because they are not magic levels for a stock to bounce.

Think of the short sellers who are looking for a quick kill, they will consider those technical levels as a place to begin to cover because they "often are support." This removes supply from shorts and turns them into buyers (demand) in that area.

Sidelined cash who missed the big up move, look to those levels of interest as a place to get involved in the long term trend, more demand.

Short term traders looking for a bounce know those areas often become support so they stick a bid in, more demand.

Big funds who sold some of a large position into strength but still have large long exposure stick bids in at those levels, more demand.

When one or more of these levels of interest line up together it makes it more likely to become support because more participants come to the same conclusion (it doesnt make sense to sell here and maybe a place to cover a short or buy/add to long) in the same place.

Where does the supply come from? Often it doesn't which is why a bounce does materialize.

The key (as always) is to know your timeframe, wait to see the evidence of buyers taking control and then know where your stop is and manage the winner with stops trailing up under "the most recent and relevant higher low" for your timeframe.

If you made it this far, please RT it, this is super important concept.

[Brian Shannon, CMT ⚓️ @alphatrends]

VWAP Combines Price, Volume & Time
Price- shows performance #onlypricepays
Volume shows commitment of participants
Time is subjective, personality & goals based

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