Stuck in a lateral trading range
The lateral trading range sets the limits where the short-term traders will buy and take profits. This is a profitable trading strategy if you are nimble and have the proper trading systems in place. The recent high of 11,900 is an obvious resistance point and the even number of 12,000 near the 200 day moving average will be a key recent point.
What do we have to see for the intermediate period trader? The TSX Index will have to make a confirmed break above 12,000 to have a chance for a run at 12,800. A confirmed break using a filter of 2% would be 12,240 that holds for two days which is the time filter. This is a guideline to guide you in your trading decisions. Technical analysis is not infallible as the markets are governed by the human emotions of greed and fear. And these are powerful forces which can produce severe gyrations in the market.
Always trade in the direction of the prevailing trend. What is the major trend for the TSX Index? What is the intermediate trend? What is the near-term trend? You decide and make the appropriate trading decision. It is your money.
Relevant articles picked from the Web:
- Canada stocks jump, buoyed by mining and tech — MarketWatch — August 7, 2012
Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts with other technical indicators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.
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