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 time.
No position, for now.
