Reaching Support at 26,300. Watch this Level Carefully Monday
“…we have the Support Level below at 26,300, plus the next Resistance at 27,000. That’s still fairly narrow range of just 700 points. The market should move within this range for at least a few sessions, providing trading opportunities at each level.” Friday, we had a nice, slow descent to the Support Level that we have been marking at 26,300. For Monday, it’s rather straightforward – watch for a break or bounce off this level. I personally think it will bounce and head towards the top of the range. But if it breaks through, that will be fairly bearish, suggesting a continuation down to 25,000.
Repeating Thursday’s commentary, “Now we need to watch the lower line at 26,300. A break of that line, the bottom of the wide Trading Range, would be quite negative.” As I mentioned above, I doubt this support level will be broken, as the market seems to be orderly in its descent, with little volatility. Looking at the Daily Chart, we see that the range which has formed over the past few weeks is a narrow Consolidation itself, generating a projected range target of about 28,200. Therefore, the “way to bet” is for an upside move – unless we break 26,300.
With the obvious lack of volatility, I still say the market is waiting for something. Until “it” happens, we are in a nice trading range that can be traded as the market finds its sea legs amidst an ocean of uncertainty.