K.I.S.S.
With all the tools that are available to
the technician, it all boils down to price and volume. Sure, there are plenty
of fancy derivatives, but it’s the footprints that these two these leave
that most often give me a clue as to the market’s next move.
Heavy volume on a move down often means that
investors want out. When the ‘big red bars’ in your volume window flash
relentless selling, you can rest assured they are doing just that, getting out
of the stock. But remember, volume can be a two-way street. After strong
distribution of a stock, especially when it happens in a technical zone, the
next high-probability move will quite often be a reversal play. Everyone that
wanted to sell has already done so, and now the stock is free to move higher as
the immediate pressure has been released.
10:40:46
Intraday
Setup Alert
Maxim Integrated Products (MXIM)
is testing a confluence of exponential moving average (EMA) support. The
stock is down 1.45 on very heavy intraday volume at 37.14 as it tests a price
support zone consisting of the 20, 50, and 200-Day EMAs. Intraday, the stock has
formed a ‘doji’ low with an inside bar being established currently on the
5-minute chart. Session lows fall between the 1.5 and 2 Volatility bands.
Possible triggers for reversals might be considered above 37.20.
‘It ain’t easy’, but the technical picture
combined with a highly liquid, tight pattern definitely presented a solid trade
opportunity with edge…that just happened to resolve itself in the right
direction.