M&S about to go down the drain

Cheers Haystack.

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OFF TOPIC:
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Hi Paul,

I think you will find that the reason charts move in trends and especially channels is because it is alot easier for the market makers to handle. When these channels are broken, this signifies a change in sentiment, with which the MMs have to deal with, due to changes in supply and demand, so they break up out of the trend or down out of the trend. Don't forget, there are also lots of other people who are watching the exact same trends forming, and will act in the same way, as they are looking at the same indicators, same highs and same lows, historically.

Lets take a few examples:

In the SBRY case you can see clear channels that have formed, with support and resistance at work. you can also see how the RSI has been used for trading.


With BP you can see how support and resistance are based on previous prices, aswell as clear trading channels.


These things can also happen in the short term, look at fdp for example. It broke out of the downard trend and I purchased at 57p which I felt was confirmation of a break out, with nice volume to confirm that this break from the trend was forced by market sentiment (confirmed by MACD). It then proceeded to correct upwards, and I was prepared to sell at 60p, which was a level of resitance, however this was broken, after which it bounced of that level, turning it into support. after that 77/78p was on the cards, which it failed to break through. That was an indication to sell. However, I wanted to see if support was strong at 70ish p, but the indicators were turning against me so I sold out in the 75-70p range.


You may say- AHH, with hindsight.

Well here are a few to watch over the next few weeks:

TON: If 110p is broken, then 130p, then 150p are on the charts. Note also the trends within indicators. Also, not incredible volume at this breakout attempt, so that makes it more likely to fail. On the bull side however, the lows have been higher.


Another one breaking out, this time into clear sky (ie no price targets set, I just go with the indicators) is SBT:


There are many out there. As you can see with MKS, it is in a down trend and downward sloping channel, which I will stick to untill there is a breakout, at which point I will go long, or atleast close my current short. That would require a price of 150ish p atm.


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Regards,

Scram.