Jako please be brutally honest with me.
OK here goes....
A. Breakout on massive volume. Price closed in the lower half of the bar however, which suggests that amongst all of that buying there was a fair bit of supply as well. If there was no hidden selling, the close would have been at or near the top of that bar. That breakout bar needs to be checked against the next couple of bars to see the amount of supply that was absorbed and the extent of potential weakness moving forwards. A horizontal line could be drawn from the days high to the right of the chart. Later I would expect it to act as either some kind of potential support or demand.
A- Now when I first looked at this chart this morning, the first thing I noticed was that there was not any obvious accumulation off the lows.
So I guess the widespread bar 'A' was completely built on announcement, and there was both a massive scramble to buy and sell shares. Buying by those who loved the announcement, and also the relief of being able to sell out of a position, by those existing holders who had been trapped in a losing position, perhaps for sometime.
I don't know about it being breakout (I guess it was in a way...and I understand what you are saying), I am possibly being a bit pedantic, but to me the initial breakout came when price broke out above 1.5cps (go back and have a close look), I'll do something in the future on breakouts, and then you will understand what I mean. But anyway, wherever the breakout came, yes there was a big battle between supply and demand as you say.
But I don't think there was any "hidden selling" in there. If the selling was 'hidden', the bar would have closed high, and you wouldn't have been able to 'see' any selling by the spread of the bar, or the close. But then if the next bar then closed sharply lower, you could 'infer' that there must have been "hidden selling" in the initial bar.......do you follow that ??
Hidden selling is where the professionals slowly feed out their stock to fresh new buyers without knocking the price down, usually on some sort of good news event. They may even buy some more along the way from time to time (maintaining momentum) to keep price moving higher or maintaining the highs, and then close the stock high on the bar, to leave a bullish 'gut feel' on the stock.
Yes, the bar needs to be compared to the next few bars for sure, and as a rough guide, the close may roughly show where the supply was absorbed up to.
What I mean is- from the close and higher, the seller's won the battle, and there is probably more supply up there waiting to sell (which will need to be absorbed if price is going to continue higher), and from the close and lower, the buyers won, with the majority of the supply at these levels already bought or absorbed.
Yes a horizontal line could be drawn at the highs, and possibly even the close, mostly because this bar is obviously an important bar. But importantly, keep an eye on the lows of that bar. If the lows were to be broken (and closed below) that would suggest that the sellers were completely overwhelming the buyers, and it would be a serious sell indicator. So while price remained within the range of that bar, or more particularly, above the lows, price was potentially bullish.
So yes, you got most of that correct as far as I saw it GF, a pretty good job.
Gee that was a whopper of an answer for the first bar....but it was an important bar
I'll try to be a little more concise on the next few bars......sometimes I do get a little carried away......
back in a bit,,,,,
cheeers
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