Patiently watching AHZ last few weeks, a potential test on the daily today needing confirmation tomorrow, appears supply has dried up at this level before taking on previous supply in the area of that breakdown bar, appears to be building the "cause" via accumulation with smaller spread but subtle bullish volume (volume increasing on rising SP and decreasing on falling SP) and higher volume down bars that haven't followed through, but close flat or up over next day or so, that look like buying taking place.
Some low volume testing taking place over the holiday period and some small volume increases having the desired effect of a rising price, the path of least resistance.
Presuming the high possibility of excess supply, via trapped holders at the breakdown bar, in the blue trading range, I'm considering ways this may trade from here in the short term.
1. Continue to trade sideways in the existing range after finding supply from trapped holders or a lack of demand, on an up bar (weakness) above, a move down to draw out this supply and further building on the cause for a potentially bigger move at a later date. This may even take the shape of a small correction before a further move up.
2. Continue trading higher with gradual higher volume upbars from bullish CO, content with current lack of supply, to absorb, available supply up through the supply zone, most likely being tested in the process before moving up beyond this area of previous supply.
3. A sharp gap up move through the old supply zone attempting to convince trapped holders into holding longer and therefore not preventing a further rally in price. Im thinking probably a risky move considering recent history of price spikes with massive volume after gap up in October.
4. A shakeout or a small correction at this point in time would fit quite well before any of the above possibilities, a final bullish test drawing out any potential resistance before moving higher.
Any comments or further suggestions welcome, been reading Tradeguider "Master the Markets" from Tom Williams, great book, very well written, easy to understand if anyone's looking for some VSA material.
Cheers HF