Well played to those covering shorts on Friday! o_O The gap down...

Well played to those covering shorts on Friday! The gap down on open drew out supply (willing sellers) immediately in an old fashioned shakeout. There seems to be bit of supply around the 96c to 98c mark – stale holders panicked in to selling from back in July/Aug last year? Profit takers from recent entrants at 80-85c?- good luck to them- you can’t make a loss from a profit after all. Doesn’t matter who or why, this supply acts as resistance to further upward moves so we need to see the back of them anyway.

Price hit extremely strong support at 92.5, where it bounced off that level like an Olympic gymnast, to end up closing above mid candle- a sign of strength when price is tested like this. However there still seems to be supply at the 96-98c level, so I tend to agree with @toneO in a previous post that we could be in for some sideways action in a range until this is all mopped up.

Shorters have doubled their rate of covering over the last 6 weeks compared to the previous 2 months, and the last thing any of them want is the price to go up further, making it even more expensive to buy back and quit their positions.

So another gap down on open today perhaps? I’d expect lower volumes today but have just set my alarms for 92.5 and 98.5 – to see what happens at those levels if I get a chance, looking for another entry point.

Good luck everybody!