Yep, you have called the individual bars correctly, but the...

  1. 16,642 Posts.
    lightbulb Created with Sketch. 1291
    Yep, you have called the individual bars correctly, but the context is an uptrend, and checkout how many upthrusts there are in that uptrend recently.
    I think this stocks personality (or the traders behind it, who give it its personality) is possibly to use this type of trading to their advantage.

    The two upthrusts you mention don't have much volume behind them, and an upthrust is normally a confirming indicator of previous weakness (apart from when it has very very high volume). And the trend is generally up, so I would guess that those two bars are maybe what I call absorption bars (price action which is attempting to suck out and absorb supply, clearing the way above, and the low or temporarily unsupported close is to flip out short term traders at the same time).
    So even if enough supply is drawn out to cause price to pull back, it may only be a shallow pull back (similar to the previous upthrusty bar on 22nd August, and the subsequent trading), otherwise I expect there is a decent chance price will defy regular thinking and continue higher.
    Perhaps the lower close today does suggest there will be some downside, but I think it is unlikely to be terminal weakness.

    I guess we'll find out soon enough.......

    RXP 251016.png


    cheer
    Last edited by Jako8557: 25/10/16
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.