The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

(sohrab1953) #1

Trend Analysis


In Figure 5.56, we see the same trend exhaustion occurring at a significant
resistance level created by a strong price rejection at the high of a very bearish
shooting star pattern. We also notice how the gaps help define the various phases
of the market.
It must also be noted that gaps tend to create areas of potential support and
resistance. In Figure 5.55, we observe the gaps giving rise to subsequent levels
of support in wheat. In Figure 5.57, we also observe gaps giving rise to areas of
support and resistance on the 15‐min chart of SPDF Gold Trust Shares (GLD).

figure  5.55 Gaps Defining the Three Phases of a Trend on the Weekly Chart of
Wheat.
Source: MetaTrader 4

figure 5.56 Forecasting Trend Exhaustion Using Gap Analysis on the Weekly Chart
of Wheat.
Source: MetaTrader 4
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