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TheGladiator

8,601 Posts.

102

06/01/16

22:54

Post #: 16743936
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Originally posted by Jako64 ↑

One other thing I should point out.....

Consider that bar on Monday, which attempted to breakout, but was challenged by supply and closed poorly on an increase in volume.

Each time price moves above the 4.3cps level (where it appears that the stronger resistance lies), it should weaken the resistance (supply) which is waiting there.

Or put another way, there is a certain amount of supply wanting to sellout above 4.3cps, and this selling will cause resistance to price rising.
Each time price pushes above this level (even if it eventually fails on the day), some of that supply is bought, therefore reducing the amount still for sale above 4.3cps, and in turn reducing the strength of the resistance at that level and above.

That is why price (on any instrument) sometimes has numerous cracks at punching through the resistance above, before it finally breaks the resistance (absorbs all the selling) and moves higher (often sharply as the selling pressure at that level is now so low, price can rise easily).

cheers

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How important is it that the SP retraces after breaking through resistance and retest it to make sure no more supply exists at the previous resistance?
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