Visual evidence that opening price level makes good technical support resistance
The following are daily charts: By observing price action (following days) at the opening price of each month (black horizontal line) we can see evidence that price reacts to those levels. Being technical support resistance does not mean that those levels will not be penetrated. It is likely that they WILL BE violated by intraday trading. However when price crosses the open price and back again, it demonstrates what price does exactly when it meets a technical level. See price turn this way and that because of technical support resistance by opening price (follow black arrow).
Usefulness of simple cue coming from open price
- Easy to use.
- Part of price action trading that does not rely on trading indicators but on getting the story directly from price.
- Additional value as a optimum zone to look for swing trading, short term investing signal.
- As potential stop loss level.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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