Wednesday, May 17, 2006

 
Trading Education Tutorial

Support and Resistance in an Uptrend

Although the motivation is not the same, many of the same forces that lead to technical downtrends are also at work in the creation of the technical uptrend. These patterns occur because investors chasing a strong stock rationalize that paying a higher than their intended purchase price is warranted given the strength of the issue. The higher the stock price moves, the more likely it is that investors will rationalize why paying a higher price makes sense -- to a point. Some will argue this rationalization process is directly related to a perceived change in fundamental factors and very often this is true. Understanding technical analysis does not mean that fundamental factors should be dismissed...

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