Tuesday 15 June 2010
Last time, we recommended buying weakness and did so at 1076,
last Friday, shown on the chart. Of some concern was a narrowing
of Friday's range, indicating some lack of demand. Overnight trade,
coming into Monday's day session, showed price rejection at the
1096 area. We felt it was opportune to take partial profits at 1094,
pre-opening. As the day developed, a lessening of volume and
upward range extension suggested there was not enough buying
activity to get through overhead resistance, so we opted to exit the
final portion at 1099, just prior to the highs for the day.
It is apparent from the low end close on Monday, [second bar from
the end...the last bar is overnight activity and pre-opening for
Tuesday], that sellers were still active in defending the upper end
of the trading range, and it appears that a reaction may ensue.
Support is expected around the 1070 area, which happens to be
a 50% retracement as well as where demand showed up, last week.
The 60 minute chart gives a more detailed look at where support is
likely to halt any decline. 1070 is the 50% retracement, and there are
a few lows that held just under 1070 on 10 June. As always, support
or resistance should be viewed as an area and not an absolute price.
For as long as the trading range remains intact, anything can happen
in either direction. We have areas where we want to initiate a new
position. It will depend upon HOW the market activity develops, at the
No position, for now.