is resistance at the height of the bar or the candle wick?

Discussion in 'Technical Analysis' started by cashclay, Oct 25, 2017.

  1. And some discount entirely S/R that's not at lines already on a vanilla chart.
     
    #11     Oct 26, 2017
    wrbtrader likes this.
  2. SQ is showing this beautifully today at $33. Pick your charting period, it's showing on all of them.

    Look at the Nov options chains and how much open interest there is in on the call side for the $33 strike and how little there is on the put side. This is typical delta-hedge S/R. And as foretold, it pulls towards the S/R level, and when it leaves, it does so like a rocket ship.

    Edit: It did it at $28 too on the daily chart. Note how there are either long candles through the price, or candles that touch the line. No tacit moves through S/R.

    Other good ones: FB, AAPL, NVDA, and NFLX at $150 (and all got there around the same time).


    One more edit: As far as practical application of this knowledge, 35 and 37 will show this pattern on SQ in some permutation before mid December (look at the chains!) and 40 will show it very strongly by mid January.
     
    Last edited: Oct 26, 2017
    #12     Oct 26, 2017
    vanzandt likes this.
  3. Looks like we might get a test of the first hypothesis of this today. If I was a bettin' man, I'd be of the opinion that SQ's last tick today is exactly 35.00 +/- 0.02.
     
    #13     Oct 26, 2017
  4. SteveM

    SteveM

    In certain markets like gold and currencies I think trendlines have value for determining possible support/resistance...definitely not perfect, as you alluded to, but helpful....in other markets like the S&P 500, I've found prior hour/day/week/month high and lows to be more valuable.
     
    #14     Oct 26, 2017
  5. Grantx

    Grantx

    @Macca1
    Do you even know what you are talking about? The question is about candles. You are just trying to sound clever by defining levels in orderflow terminology.

    @cashclay
    IMO on your trading timeframe the candle body is what matters but only when compared to the closing position of other candles. One closing candle on its own mission is nothing but if you have a bunch of candles all closing in the same area with wicks then you have price action that is telling you something.
     
    #15     Oct 26, 2017
    wrbtrader likes this.
  6. Well, close but not quite. It definitely paused for nearly 2 hours at 35, but pushed through. I suspect we'll see $35 a lot more before moving higher.

    Yesterday also showed an interesting pattern. The $34 Nov puts had a ton of volume yesterday that would have been hedged and kept down the price.
     
    #16     Oct 27, 2017
  7. Hooter

    Hooter

    it can be. what does the daily look like and how is the volume?
     
    #17     Oct 28, 2017
  8. That was quick! And in consideration of that, I'd start doubting my prediction of $40--we might gap that on earnings.
     
    #18     Nov 1, 2017
  9. oraclewizard77

    oraclewizard77 Moderator

    Myself, I would consider the bottom part of a candle not the wick, the support level. Also, I define something called recent support and main or daily support.

    In an uptrend, price in the form of candles pulls back to a certain level and is at least tested later one time, where this level holds. This is called a recent support level. This can for intraday trading provide a possible trade setup with and only with confirmation from your other technical indicators.

    The benefit of the recent support level is that you don't need to use a huge stop, however note that sometimes support will break by a few ticks so you don't want a tiny stop either since you need to give the trade room to breath.

    Now the target if you are scalping can be a few ticks, or if you use multiple contracts, you could have some sent to go back to target the resistance.

    Now obviously the recent support can break and price can trend down to the main or daily support levels. For example the daily support level could be defined as the lowest price that was hit during say the morning hours of the day. This price level should hold unless we have a trend reversal. A trend reversal can be caused by for example a negative report coming out later in the day, or North Korea launching a nuclear missile at the United States. This is why I use stops.
     
    #19     Nov 2, 2017
  10. The open (of a trend candle), not the high or low.

    A trend candle defined as the open-close range > than at least 50% of the high-low range.

    And as others have said, not an exact price but a zone - in relation to the close of the current bar.
     
    #20     Nov 2, 2017
    murray t turtle likes this.