CONNECT - Oversold with No Supply bar at support
Hi,
In mid May, price broke above horizontal line A at bar 1. Line A was a siginificant resistant line from early 2020.
On June 2nd, price re-tested line A, making this line A a significant axis line. Price rallied and break above resistant line B.
Then price slowly declined after the high on June 15th. Fast forward to July 16th, price gapped down and formed a down bar with close at the low with high volume ( bar 4), and this high volume down bar with close at the low may indicate a selling climax. Price was near the previous axis line A, and it was also at the "oversold region" within the down trend channel (formed by trendline C and C').
Bar 5 was a down bar that managed to break below axis line with moderate volume, but two days later price closed back above line A, thus creating a potential spring setup. Then we had bar number 6, which was a down bar with small spread with volume lesser than previous two bars. This is a No Supply bar in VSA term, and it may indicate no more sellers left to push the price lower.
So to recap : price is at a support area (axis line A), in an oversold position (near the down trend line C'), and we saw indication of strengths coming into the market : Selling climax, potential spring , and no supply bar.
I'm looking forward for price to go up at least till the line B again
Trade at your own risk, comments are welcomed
In mid May, price broke above horizontal line A at bar 1. Line A was a siginificant resistant line from early 2020.
On June 2nd, price re-tested line A, making this line A a significant axis line. Price rallied and break above resistant line B.
Then price slowly declined after the high on June 15th. Fast forward to July 16th, price gapped down and formed a down bar with close at the low with high volume ( bar 4), and this high volume down bar with close at the low may indicate a selling climax. Price was near the previous axis line A, and it was also at the "oversold region" within the down trend channel (formed by trendline C and C').
Bar 5 was a down bar that managed to break below axis line with moderate volume, but two days later price closed back above line A, thus creating a potential spring setup. Then we had bar number 6, which was a down bar with small spread with volume lesser than previous two bars. This is a No Supply bar in VSA term, and it may indicate no more sellers left to push the price lower.
So to recap : price is at a support area (axis line A), in an oversold position (near the down trend line C'), and we saw indication of strengths coming into the market : Selling climax, potential spring , and no supply bar.
I'm looking forward for price to go up at least till the line B again
Trade at your own risk, comments are welcomed
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