There are sound explanations to back the patterns on charts, based on the actual buying and selling motives at market. It's easier to say that when it gaps down or falls rapidly there is low resistance in that price range and the same applies as it rises through that range and that can sound like mumbo jumbo to many people. What TA does offer is the chance to trade based on rules rather than getting caught up in emotional hype.
Here's a couple of examples.
You could have and might still be able to buy at 61c or 61.5c with a very tight stop at 60.5c but you would need to be glued to the screen and ready to sell at market if it touched 60.5c.
You could sell those close to the 91c target, buy back at the 75c support and then buy seriously if it takes out that 91c? high because it would then be trending up on the daily chart, higher low[75c] higher top[91c+] and set the stop just below the 90c level.
At least it's a plan that's designed to make money and minimise losses rather than doing what many are doing and averaging down based on hope, luck and faith. If it folds, they pay the ultimate price, as usual.
CMR Price at posting:
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