Sometimes we call it support/resistance lines.
These lines are so interesting. To a non Technician, they would appear irrelevant.
To the technician, they are the primary basic structure inside the toolbox. I don't need to convince anyone as to how important they are. At the Banff Conference we learned so much about the different approaches to the market by various technicians. From Fidelity with $1.3 trillion to blog writers and floor traders, the horizontal support and resistance lines are important. So check out this chart.
We are about to find out if the $TSX is able to break through. The recent move through the 40 wma is bullish. Now we approach the horizontal resistance line. Check out how the stochastics reacted to this line. In 2010 the sto's stayed in overbought as the price tested the line and then fell back. Now we test the 50 line from below. What makes it interesting is the way it was supported at the sto's 50 line in 2007. Here we are trying to push through again after being rejected at 50 on the sto's earlier in 2012.
This movie just getting started.
Good trading,
Greg Schnell, CMT.
