Can Precision Drilling (PD) hold the new support level of $12?
The most important points to note in the Precision Drilling (PD) chart analysis are:
- The major trend, intermediate trend and near-term trend are all up.
- The 40 day moving average is a good approximation of the trend line.
- Always trade in the direction of the trend.
- There was a breakout above resistance of $12.
- Major support is now $12.
- The reversal of resistance to support is an important principle in technical analysis.
- The breakout was on above average volume.
- Trading volume measures the force behind the move.
- On balance volume is confirming the upward trend.
- The MACD confirmed the breakout.
If an online trader made a buy on the breakout at $12.50, the trader must set up a stop-loss at that time. A reasonable stop-loss would be below support at $12. A stop-loss of $11.87 would represent a loss of around 5% and maybe not close enough that it would be taken out on a light test of support. Anyway, you will be around to trade another day. Risk management is an important concept in online trading. Preservation of capital is rule #1.
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