Using the dow as the example chart (stocks), the Dow began to range trade from the 16th April 2010 at 11018 which followed through on the 26th April 2010 at 11205. Volumes started to thin out and the market was cautiously reacting to technical and fundamental trading signals. The subsequent correction took place on the 7th June as the dow fell to 9816. It has since regained momentum and now has begun a similar range trade patten starting from the 15th June 2010 at 10404. Although currently we are now starting to see long position/s scaling back and trading volumes thinning out.
At this point the dow looks supported with pivot point supports at 10360, 10279, 10162, the rally range top is 10757.
Downside pressure is there with a possible corrective move (sell) with the next 3 trading days (end week 25th June 2010)
Refer to the vertical lines for the 16th April 2010 at 11018 and 26th April 2010 at 11205 (10 days of range trading)
(refer to chart)
A similar patten has occurred from the 15th June 2010 at 10404, we can see the range trade beginning (8 days) with a possible downside correction on the 24th/25th June 2010
(refer to chart)
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