ever since 2000, I think the best anyone can say is "potential support"... imho when there was more public and mutual funds then maybe classic support characteristics allowed for more "certainty" or likelihood of a given level 'psychologically' attracting buyers/sellers. But now, not all seemingly classic patterns or S/R seem to present an edge. For example, many saw a triangular pattern on NDX figuring there was real potential for a continuation move higher during the first 5 days of N/Y. Yet look what happens, we have a sharp correction back to 50 day ema, and suddenly long positions look suspect, and shorts look like geniuses. Guess the 'adage' that the market frustrates and f*ks the majority of traders apparently still holds true. Ice
Well, evidently S/R is not your favorite tool these days. I use summation of volume traded multiplied by amount of trades that occurred at certain price levels. If I see a spike (200 - 300% higher bar) on my histogram I consider it to be a significant support (resistance) price level. It has been one of the most reliable indicators I have in my tool box. I have learned to pay attention to it as it saved my ass many times. So, I say that $58 for ADBE is a significant support. It means that when we get there we can discuss the price behavior at this level. I am more then certain that you'll see what I mean.
obviously S/R will work if ID'ed correctly and it sounds to me like your method is a good one. I guess my thoughts were addressed to how many times we'll hear someone (and all of us have done this or thought this way) that a given level is (i.e.) a D/B even though there is little volume at said 'low' to legitimately consider said area as "significant", not to mention incorrectly analyzed. For example I recall taking classes at CME and how much harping was done on how some traders insist on preempting a move from what appears to be a reliable pattern and/or a S/R level, without awaiting confirmation. Not that one should not ever try such a play if they trade discretionary. Besides in today's markets IMHO, there are better trained and more insightful traders than in the past years (unfortunately) Thanks for the reply... regards,
Thank you, it should be an interesting experiment to watch the ADBE price behavior at this level. I played it by selling a strangle, so $58 support is important to me as it should hold the price in the channel. At least it is my hope.
you know the value of opinions... .......... (and I don't really follow adbe, although I did put in on my radar screen) .... but those April 55 puts would have me worried. Do you plan to roll down ot 60 or 55c if ADBE breaks down. Not saying it will or could, but what would your repair be; or would you just exit both sides?