During the course of the week, several scenarios occurred that involved discussions with stocks that were in “no man’s land” – just no apparent edge to a trade, floundering around in between 2 key moving averages for example. In my chart review this morning, I came across the Daily chart of $MAS (Masco Corp) and it served as a reminder of trades that are more ideal – where price is near a moving average, trend line, or an inflection point so a battle then ensues between the Bears and the Bulls.
Here is a glance at the Daily chart:
Let’s review the inflection/resistance test points in recent days:
- You have the bounce off the 100 day moving average, nice and clean buy point
- The test of the 20 day and 50 day moving average, nice break through those.
- Then on to a test of the resistance level (prior breakout level, then support which failed to hold, now resistance). Price is peeking up through this resistance line now.
- Now testing the upper Bollinger Band, which acts as some resistance.
Bears will short here on the thesis that the upper Bollinger Band acts as resistance to price. Bulls will monitor for a hold of this breakout and play for continuation.