Bounce!
Just as you can learn something about the reliability
of chart patterns when something unexpected happens (as is often the case), so
too can you learn something when everything happens the way you’d expect.
The very best type of pattern to look for is one that is a combination of
patterns that all reinforce the same conclusion. You have a great example of
this in Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating).
Tuesday, CIEN pulled back to its 50-day moving average, support off its old
penetrated resistance level which dates back to last March, and its 50%
retracement off its early-August low and early-September high. All this is
happening at 200% of CIEN’s average daily volume.
All these support factors coinciding at this price level seemed to be
shouting in unison to me and my fellow technicians: BOUNCE!Â
It’s nice when this stuff works.
See you tomorrow,