Yes it's a valid technique and often used, I'm just questioning it in this instance at this point in time. I have the top of the creek at 84, and if we take the previous three bars as no demand, why the sudden need to gap up over resistance and then why not follow through? The close is (part of) what concerns me, if the close was at the top of the bar then I'd be saying game on.
If you have the creek at 82, which is a valid point as that is where supply seems to enter, then there has only been two tests of this, neither "recent" and neither with intent (high volume), so why the need to gap up?
Looking at the weekly, the 4 bars I have marked as absorption, the next 2 bars if you combined them would count as absorption, or perhaps better described as a test and confirmation? The last bar shows good ease of movement, but there's no volume spike, the last 3 bars have virtually identical volume.
I'm not saying that the gap up is bearish, I'm just not convinced that it's as bullish as it appears at first blush. I also inverted the daily to see if it looked like a spring (and therefore an upthrust uninverted) but it doesn't look like that - I think I'm just saying that it's potentially not a breakout.
I'd be looking for confirmation on Monday, that's all. My gut feel is maybe the accumulation has only been ratcheted up so that now 84 is the ice, as opposed to a breakout.
