As a person that puts a lot of preparation time into Stock chart review each week, one thing I often see are stocks that are in “no man’s land” – there is no easily definable edge to be seen at the moment for entry (long or short). There are however, many that offer a clear picture of a stock that has reached an inflection or pivot point.
For an example, I bring you the Monthly chart of $ACAS:
In this chart above, what you have is price arm wrestling the $10 price level (key psychological area) as it hits a KEY resistance line that has been in place since late 2008. You may also note the massive Volume at Price (VaP) bars down here – a significant floor is now in.
The play here is to play the breakout of $10. If the breakout fails and the stock once again finds sellers, the 2011 low of 6 is solid support.