Weekend Charting 28th July - 30th July 2017, page-45

Please note everything below is all IMO only, I'm still learning and the more I learn the more I realise how little I know, however I'm staying the course and really getting enjoyment out of finally making some sense out of the chaos
IPH - I've been playing with these for a while over the weekend, I usually try to fit a horizontal structure first as its based on horizontal support and resistance lines which are much more fixed than their angled cousins, however it doesn't always frame the action as well as you would like so that's when it's good to adapt the structure, sometimes it fits, other times it just doesn't make sense. I guess the aim here is simply to attempt to identify the motives of those with the greatest influence on the stock in question, whether, in this case, being at the tail end of Mark down, this is an accumulation or redistribution. I managed to make a case for both and I've posted below both structures. I've tried to reduce acronyms for those still learning to get to know the terms as well, I feel I should post the template here as well to avoid confusion so apologies for the huge post.
TEMPLATE below - IPH would be found either on the right hand side in the middle as redistribution or at the bottom on either side as accumulation.


My first is the early case for Accumulation and this is still early in building the structure so I've found not to be very reliable. I found this to not be a great fit but that could just be me as I'm still learning to adapt to unusual structures, however if this is accumulation, its recent Spring action could be seen as a Terminal Shakeout in Phase C, and we could expect to see strong demand come in here, ideally with increasing volume and spread, taking price back to, and breaking, the top of the trading range, so this should be fairly simple to identify whether what is happening next aligns and whether or not it's positive. Price could also simply continue sideways here as well for an extended period or test this recent high volume before making its next move, however if this is to have a  positive outcome it should show its hand relatively soon.


In the case of redistribution, the structure framed really well while uptrending slightly in the channel, (a bear flag?) it would effectively be completed and looking to settle in a new range below the existing one, it could simply trade sideways, be accumulated or redistributed again but it may first need to build a new cause to support its next move, refuel so to speak, it may even be redistributed again in a similar uptrending channel, just considering all the options.
Looking at the chart below, Preliminary Support came in some time before price dropped into the channel and prices rallied back up to around 5.40 before losing momentum and continuing the previous downtrend. Interestingly some support was found along the top of the channel again and even attempted to rally away before it appears demand dried up and price gapped down to where support inside the channel appears to have initially come in, (I did originally label this as PS however it wasn't ideal as PS is usually found in line with the AR, I marked this level with red line as it appears to have played a key role as support/resistance throughout the Trading Range) From this initial support continued weakness saw prices fall to the point I've marked as the Selling Climax, this point was preceded by some large selling however I think testing let price drift lower and setup as a Spring before demand came in to fill the vacuum left by excess selling and rally to the point of Automatic Rally. These points of SCX and AR set the upper and lower boundaries of the Trading Range, price can break above and below the range but until a move with enough strength to either markup or markdown in either direction is sustained price will usually return to the Trading Range. Folloewing the AR is the Secondary Test of the SCX, these three actions together form what is known as Stopping Action, usually they will be the point of a Change of Behaviour (COB) where trending stops and price trades sideways. The next point I have marked as Upthrust After Distribution (in the case of distribution) or Upthrust Action (in the case of accumulation) as these cannot be correctly determined until the outcome is decided to have been Acc or Dist. From here price broke into the lower half of the channel again and tested the SCX and the High Volume support line and failed to regain the upper half of the channel before closing outside below the channel, this would be considered a Major Sign Of Weakness (SOW), confirmation of which is a Back Up To the Ice, (the ice being the floor that price just broke through and Back Up being the test of the break) it is the test that gives confirmation to the MSOW, price can rally weakly up to halfway into previous range on reducing volumes before continuing back to below the Trading Range as confirmation, from here the final part of the Distribution structure is Mark Down outside the Trading Range which it definately appears to have done to the point of its recent Spring (of which I've noted is an extremely small break of previous support before demand came in which should indicate strong support here) and higher close. My only question is where to from here? I would assume with that high volume some testing will be required and some substantial demand need to come in to break back into the previous range, may just need to trade sideways and build further cause. A bit undecided hence the two charts but lending toward Sideways or for me, interested to see where it goes over the next week may reveal a bit more.

Cheers HF