The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
It appears to be normal price action. Price went lower yesterday to pair / fill orders. Those orders have been filled so price is now moving higher.
Bullish scenario No.1: A market structure shift has occurred & the 400 level becomes the new 'support'
Bullish scenario No.2: Price moves lower but no lower that the midpoint of the up close candle (390 level) @ 14.30pm on the 15 minute chart before moving higher.
Price needs to be efficiently delivered therefore price has moved lower to fill the gap created on the 19th July @ 8.0am.
Price has also moved lower to a discount level which is where professional traders will place their buy orders. Their buy orders will be paired with sell stops.
I am invested & in a ideal world be looking to take partial profits above old monthly highs 840, 960 & 1020 levels & then if my bias is still bullish I would leave something on the table for the longer term anticipating price reaching the 1220 level (June 2022 fair value gap).
It all depends on how long you want to hold a trade for & how comfortable you are with price retracements.
Assuming you're bullish & anticipate higher prices - A short term bullish target could be 480 which is above an old high & just below a volume imbalance (gap in price between the previous open or close). The next targets could be 600 & 670 & 780. Above 780 price could look to take out the old highs.
Approximately 90% of retail traders lose money on the stock market - Therefore it's safe to say that 8 or 9 out of 10 people who post here lose & use message boards like this to vent their spleen. Trading needs to be learnt over a period of time (10,000 hours rule) & if you don't put the work in your history!
Could go up or down? Some here are bullish & some are bearish so I'm stating both cases.
Prepared? Very good :) Being prepared is anticipating where price could / should be delivered & why it would move to a particular level. Looking @ the hourly chart it appears the sell stops were indeed paired with buy orders this morning around the 325 level.
The SP went down to fill in the liquidity void (gap) created on the 15th June. Price needs to be efficiently delivered therefore the gap needed to be filled.
If you're Bullish / Upside? A fair value gap (FVG) was created on the 6th June therefore I'm anticipating price to @ least reach the FVG mean threshold which is around the 348 level.
If you're Bearish / Downside? 325 could be tested & price could go even lower to take out some sell stops.
I'd like to see some aggressive rejection @ the 325 level.
It was a liquidity sweep. SP dropped to take out the long entry sell stops. I'm anticipating the recent high of 369 to be taken out next or more downside & the recent liquidity void (gap) being traded too. It'll be one or the other!
Reviewing todays price action the 324.00 level was what some would call support. Price was not allowed to go below 324.0. I'm not a Day Trader but can see that there were two bread & butter day trades today so some have made a healthy profit. A long with 3% on the way up followed by a short with 4.5% profit on the way back down.
It was a Sell Stop. A long position with a stop loss below a recent low. The MMs algo don't know where the stops are located (your broker does) but has a good idea & price was delivered lower to fill & pair orders. Supply & demand & so called buying / selling pressure or MA crossovers or any indicator or similar does not move price. Price moves to where the liquidity is located which will be above old highs & below old lows.
Price has retraced to the last down close daily candle (bullish order block) on the 28th December 2022. This was the last down close daily candle prior to the upside move. Orders will be @ this level. I'm anticipating (not expecting or predicting because know body knows for sure) a move higher from this level.
Could be a liquidity sweep. Shorts have their buy orders resting @ or around the December 2022 lows & Longs have their sell stops @ the same levels.
Therefore, the buy & sell orders can be paired which would mean a reduction in the shorts.
The MM algo moves price to where the buy & sell orders are resting which is generally above recent highs & below recent lows. This is why you often see price making a new low or high & then reversing. Hopefully a bounce will occur around the 34.00 level, or we are looking @ a new low forming & the new reference point is the September 2022 low.
Investors (professional & retail) who went recently long will have sell stops @ these levels resting below recent lows.
The MM algos don't know where the sell stops are (your broker does) but the MM algos have a very good idea (retail investors call it stop loss hunting). Professional traders want / will only buy @ a discount & will place their buy orders below recent lows.
The MM algos will then pair the professional buy orders will the sell stops. It's all about liquidity & the SP moves to where the liquidity is. Buying / selling pressure or supply / demand is just a myth.
It takes time for professional traders to build long positions & building a long position isn't done for example in the afternoon session of one trading day.
@ LWHL - SP is more likely to go, or target sell / buy stops, liquidity voids, fair value gaps, bear or bull order blocks or to rebalance the SP & I guess a small free float will have an effect on how price is delivered / overall volatility.
I wish you good luck with your long position - You've bought @ a discount price. Patience should equate to profit.
After briefly reviewing today’s price action on the 15-minute chart I can see four technical reasons why the SP dropped this morning & none of the reasons have anything to do with tree shaking & all to do with efficient SP delivery & how professional traders buy & sell.
SP movements have nothing to with MA crossovers, MACD or RSI. Professionals Traders do not make buying or selling decisions based on an indicator, a moving average cross over, trend line break or similar.
Unless you are a day trading the lower time frame price action is irrelevant. If you are a position / long term trader then the monthly, weekly & daily charts are your go to time frames.
Shorts panicking to unwind their positions? Recent long positions will want to sell @ a higher price to willing buyers. Who are the willing buyers @ a higher price? The shorts are the willing buyers with their buy stops which will be paired up with the sellers that went recently long.
Retail investor buying & selling will not significantly move price. Retail investors are small fish in a huge ocean filled with institutional buying & selling large volume.