Oh, OK.......
Since the potential shakeout, which is a
potential sign of strength, and so effectively there is
potential strength in the background of this chart now (even though there are multiple layers of expected resistance above the current price, and that is the problem with actually trading it, short or long term at the minute).
So since then the next bar went up (helping to confirm the suspected buying in the shakeout), and then there were two poor closing bars that looked suspicious (they could be absorption bars, or they could be drawing out overwhelming supply). And the response to those bars was a single downbar that closed below 79cps (this was the only time I thought price may actually breakdown since the shakeout). But instead of seeing downside follow through and confirm a breakdown by printing another downbar in response, it actually showed an upbar that closed back at the high of the previous bar on good volume (suggesting support was still present). Then came another upbar (confirming the support in the previous bar again) that closed just below the middle, which obviously drew out some supply. And so in response, there was a test type bar on Friday, which did have slightly high volume, but the price action suggests that this supply was absorbed (at least for now).
So in my book, since the big deep shakeout bar, there was only one really dicey or concerning bar, and the subsequent price action suggests that was actually a little two bar shakeout itself. The response to Friday's test bar should see either a secondary test - preferably with lower volume, or a decent upbar of some sort (depending on how much supply is drawn out this time). There looks to be a zone of serious potential resistance around 83/84/85cps, and I expect price will make a run towards those levels next week, it the overall market sentiment allows it......it will be interesting to see how much supply comes out then (and will inversely show how much supply was potentially removed from the market within that shakeout.
So the catch it that yes, some of the recent bars looked suspicious, but there has been no downside follow through in response, so they must be poor bars 'in the wrong place', potentially masquerading as bad bars.......and if they are not bad bars, perhaps they are actually good or neutral bars.....
cheers
