Support Resitance Question

R

retire45

See attached chart.... The bounce did not happen.. Now what to do now?? Short?... Wait for reverse back to prior 16 support to short (doesn't happen that often) or short immediately and set tight stop?? Maybe do Nothing?

<img src=http://elitetrader.com/vb/attachment.php?s=&postid=2175179>
 

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Wow, looks just like the GE chart.

When support is broken down, past support becomes resistance. Waiting for a re-visit to this level is most prudent. At least that's what I'd do.

Shorting immediately sounds an awful like chasing to me. That's always a bad idea.
 
from a pure technical perspective, the weight of the evidence is clearly against any bounce while it is forming this rectangle (box) in a downtrend. this is a continuation pattern and likely to break to the down side. price target is the width of the box, so i guess the 10 area (can't see clearly the chart to be more precise).

while everything points to a break of the rectangle to the downside, this stock has not really broken down, yet. the candle bodies are small and it doesn't look like we've had a convincing close below the shadow of the huge white candle on the left (piercing pattern in candle speak) and the separating line (red candle touching the bottom of the box right after the white candle). patience is the order of the day.
 
I suppose one should have been short from the top of the box and using prior highs as stops, should still be short.. Coach being in Retail of importance..
 
Lets look at the COH chart again...

Quote from ctheo1:

while everything points to a break of the rectangle to the downside, this stock has not really broken down, yet. the candle bodies are small and it doesn't look like we've had a convincing close below the shadow of the huge white candle on the left (piercing pattern in candle speak) and the separating line (red candle touching the bottom of the box right after the white candle). patience is the order of the day.
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ctheo1... you get the price... I guess considering the overall markets were very close to resistance, this got saved.. and I do mean saved.... Also.. there had been 9 red bars in a row, S&P was on it's 4th red bar.. indicating not a day to start short positions... crazy
 

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Quote from retire45:

Lets look at the COH chart again...



ctheo1... you get the price... I guess considering the overall markets were very close to resistance, this got saved.. and I do mean saved.... crazy
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by "resistance" you must mean support.

resistance is an area where sellers outnumber buyers and support an area where buyers outnumber sellers. the bottom of the rectangle is support and the top resistance. it is logical to assume now that the top of the box will be tested.

of course there's an old saying "assumption is the mother of all fuck ups" but in trading and technical analysis we go with the weight of the evidence.
 
I mis-typed... believe me I know what S&R mean... I did fish 1/2 pt from COH long... I'll fax you some of the money... COH looks like a nice trader I will keep an eye on... moves well.
 
Quote from retire45:

I suppose one should have been short from the top of the box and using prior highs as stops, should still be short.. Coach being in Retail of importance..
More...
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Sounds fine, most of the medium & longer term trends are down;
even short term trends before lunch.

As liquid as that one is,end of day,dont know that one/sector well enough to be short now.Probably stay in its box;
but could test monthly highs,many bear rallys do.:cool:

Actually its making nicer, lower highs on the daily charts, moreso than SPY;
so that bearish bit favors shorts also.
 
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