CONSOLIDATION UNDER RESISTANCE
This section is about price consolidation at levels of interest and the reasons for taking the trade.
Chart demonstrates price consolidates under a major resistance, with an uptrend, we then expect this to play out as a move to the upside.
Chart below, the red band acts as a level to short and we see, a flat resistance level with ever bought up lows, lower highs, forming a triangle. So one expects after a ABCDE Elliot wave formation, the price will breakout to
the upside.
It this understanding when you should look for a breakout entry.
As of 18th of December, 2023, we see HNT next level finding another clear resistance level however this time its different formation, with higher highs as we close above the 618 fib. its a difficult chart as it could also be a topping
off structure, too early to say.
This macro chart shows that we are at the 618 macro fib level which could mean a topping off structure. Due for a ABC correction.
CONSOLIDATION ABOVE SUPPORT COUNTER ARGUMENT
Consolidation above support gives you an amazing very low risk long entry. However one must be disciplined to still look for confluences with trend lines, fibonacci levels, etc.
The argument that consolidation above resistance is bearish is valid in that one can expect a support level to only have a certain amount of buyers before buyers exhaust, just like the sellers level. Hence the level break. One
Always must remain vigilant as when price consolidates above support, it offers a low risk long or if price consolidates below resistance, it offers a low risk short.
Always look for a higher time frame bias, or another technical tool for confluence before entering a trade.
CONSOLIDATION UNDER RESISTANCE
Consolidation led to breakout, the levels were well respected.
